Basic Process of Risk Management

Risk is a word that typically has a negative connotation which can affect your well-being, safety, possessions, or future opportunities.  Most people are confronted by a certain level of personal risk that keeps them from performing or acting in certain ways. But risk can be looked at in a positive and a negative light.

A positive risk is an opportunity. A negative risk is a threat. So not all risk should be avoided, and if properly managed many threats can be reduced and positive opportunities may present themselves, even of the process is a little painful.

The management of a risk is the act to protects ones own investment, which may be in the form of education, experience, service, or financial. Managing risk is the process of decreasing the potential of threat, or reducing all the things that could go wrong.

Without getting bogged down into pages and pages of a process of risk assessment and procedural risk managing, there is a simple process by which one can approach a problem or risk and then work through to its solution. The step by step questions are as follows:

  1. What am I trying to accomplish?
  2. What could effect me?
  3. Which effects are the most important?
  4. What should I do about the most important effect?
  5. Do it. Then ask, Did it work?
  6. What changed?

By going through these simple steps you should be able to cut down on the noise surrounding a problem, prioritize the most important uncertainties, decide on appropriate responses, ie. are the risks positives or negatives, and finally decide of your actions were appropriate and effective.

From this process it is clear that risk management is an active processes, not a passive process like many meetings, committees, memos, and programs actually become.

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