Risk supervision

In each human endeavour there is an element of risk; personal, scheme or financial, or a mixture of them all. The job of the responsible individual is to recognize the risk and act accordingly. We all do these 'risky' things, roughly daily, aware that we are taking a risk. Rather than staying away from the risk we come to be adept at identifying it and having a strategy for dealing with it if the risk materialises. This is what risk management is about, and is an ability that is foremost in virtually every endeavour.

The popular misconception that risk management is difficult or complex stems from the bureaucratic methodology of some system-oriented organisations and managers. It is neither complex or bureaucratic, and need not be. Risk management is basically a straightforward proposition with a complexity dictated by the nature of the situation to which it applies - ordinarily a project, and the parties involved. In its basic form risk management involves:

Personal Risk Management

1. Identifying risk - seeing for anything that threatens the successful completion of the scheme against the original requirement. Risks can be environmental, organisational, technical, legal, economic or commercial.

2. Counteracting risk - Taking activity to take off or sell out the probability of a risk being realised. The response depends on the nature or seriousness of the risk.

3. Acting when the risk event occurs - Invoking anything contingency measures were devised for the risk that has materialised.

And for this to happen requires:

4. Monitoring at all stages - This typically means documenting a risk assessment in a profile that identifies the risk, the probability of its occurrence, and the impact if it does materialise. Factors that score supreme are those that wish the many concentration and monitoring. A good risk employer will devise contingency plans that sell out either the probability or the impact of these occurrences, and so take off them from the scene.

Working within a formal structured management law similar to that defined by Iso9001 requires the application of risk assessment practices to satisfy the requirements of the Standard. Auditors of such systems may not find specific references to risk management in these areas even though the identification of inherent failure (8.5.3) is completely concerned with a topic that is nothing less than risk management.

Well managed risk taking is an significant highlight of any send mental enterprise, since risk is an element of any progression or advancement. It is the adoption of efficient risk management in conjunction with the continuing need to drive send from a comfortable position that leads to improve and advancement. Doing what we all the time do purely because the risks appear to be negligible or are well known is to be 'risk averse', and for progressive organisations cannot be acceptable. Neither is it approved to pursue new ideas without an understanding of their inherent benefit, allowable planning, a clear idea of the threats to these benefits being achieved , and a strategy for dealing with them should they materialise. We need to manage in a manner that is neither predictable or reckless. Risk assessment is an significant tool to hold this strategy. We ignore it at our peril...

Copyright (c) 2008 Ed Bones

Risk supervision