What is risk?
Risking it all?
Never before has the word “extreme” been so cool.
You can get ‘extreme’:- videos, surfing, clothing, skating, shopping, shoes, pop bands, music, sports and now you can even get extreme accounting (just how reckless can accountants get?)
Extreme is becoming a by-word for doing something a little bit odd, but it really means: - to go as far from the centre of some thing as you possibly can.
Extremists are thought to be; reckless, out of their heads or even insane to do what things they do.
Take for example; extreme mountain climbers – who climb without ropes, or canoeists who decide to take on the biggest waterfalls and rapids or mountain bikers who throw themselves and their bikes down the sides of steep hillsides as fast as possible.
Do they do it because they want to die? or do they do it knowing the risks that they are taking?
No one in their right minds would ski off the edge of a mountain unless they knew how to assess the risks they are taking and the precautions they would have to take to prevent injury or death.
Like many things sporting, they transfer equally well to the business world and a whole culture has grown up around “risk assessments” and “risk management”
With most things driven by consultancy firms, “risk” has become more complicated than it needs to be.
The bottom line is that risk assessment is all about identifying activities which, if they happen, may cause problems.
In business terms - unless everyone needs to abseil down the side of the building, the problems will mainly be split into 3 areas: -
The work they do
Your staff who actually do the work and
The clients who pay you.
The risks may not be as obvious as a mountain biker or the canoeists, but identifying what could go wrong, evaluating how these things should be dealt with, then implementing strategies to deal with those risks is the key to keeping the business alive.
The danger that needs to be recognised - is anything that prevents the business from achieving its objectives.
These can be anything from: staffing problems, money laundering and fraud to accidents, natural causes and disasters as well as deliberate attacks on the business.
Managers need to find ways to solve the problems inherent in these risks. Unfortunately, not all risk is as obvious as a high mountain or dangerous looking dog. Criminals and fraudsters are devious and clever and your business must be constantly on the look out. You need to develop working practices, procedures and training to cope with constantly changing risk.
How will you do that? Will you use a training provider from outside your organisation? How expensive will that be? Or will you rely on your existing team to write, deliver and manage training? And what does that cost in lost day job output.
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