Risk management is about managing threats and opportunities. When is effective it is often unnoticed, but when it fails, the consequences can be dramatic, and this applies to everyone.
You are a risk manager and you may not know it, but we all make decisions and risk arise as a consequence of decisions we make. So, if you think about it for a moment, it becomes clear to you that when you make a decision, you anticipate and visualize the possible consequences of that decision in (near) future, and then you rethink the decision and decide.
As an individual you do it in your home, with your kids and family. You do it with your career, with your daily job. You are a decision maker! You are constantly reflecting on what you should do, and when you do it you are trying to manage the consequences – the risk.
Organizations are no different. There is a need to make decisions in order to continue. There is a need to optimize decision-making, and that we only can achieve when practice the risk management.
A good risk management practice ensures the maintenance of activities with the knowledge that measures are in place to minimize the negative effects and maximize the benefits.
But what Risk Management really changes in the organizations?
- Creates and protects value, because it helps organizations to achieve its objectives and to improve its performance.
- Is an integral part of all organizational processes, since it becomes part of every process and it becomes the responsibility of every manager.
- Is part of decision making, because helps to make informed choices and to prioritize actions.
- Explicitly addresses uncertainly, since it helps to identify and define the nature of the uncertainties that organizations must deal with.
- Is systematic, structured and timely, helping the organizations to be more efficient.
- Is based on the best available information, since it is important to understand how all information informs the risk management process.
- Is tailored, so it fits to all organizations and to all businesses
- Takes human and cultural factors into account, because they influence the achievement of the organization’s objectives.
- Is transparent and inclusive, by the involvement of stakeholders and decision-makers.
- Is dynamic, iterative and responsive to change, in order to adjust to new threats and opportunities that arise from changes in the business context.
- Facilitates continual improvement of the organization, by helping to develop new strategies and improve aspects of the organization.
While managing risk is a natural part of life and business, we can all benefit from knowing how risk can be better managed with more beneficial outcomes.
Learn and achieve critical thinking about managing risk. We can help you to achieve this goal.
Register on the next ISO 31000 Risk Manager course and get also your ISO 31000 Risk Manager Certification.