Stressful and uncertain times can take a toll on you and impair your judgement when you need it most. Psychologists have explained why we may neglect to identify and manage risks in these situations. This is where risk management can help by providing guidance to help decision-making in uncertain times.
Humans and risk
Throughout human history, we have been dealing with only half of the risk management problem - as an unguided mitigation of risks. Choosing risks was more a matter of gut feel.
Fast forward to the 21st century and beyond, we've established that we require a documented way to help us identify risks and more importantly, follow through using processes when the times get tough.
Complexity and uncertainty, however, are not just features of the environment but also of our make-up as human beings.
We're wired not to give up and find ways to improve decision-making even when we can't control or predict our environment.
Every day at work we manage risks. Think brand reputation, financial liability, hazardous waste disposal, evacuation plans, cybersecurity, etc. All types of organisations should be planning for certain types of risks. Potential issues involving finance, the environment, geo-politics, governance, compliance and social media, to name a few, can negatively impact any organisation's ability to deliver, posing potential risk.
Staff training is vital to help identify and assess risks as well as become an important part of the management process. Talking to employees and other relevant stakeholders about the everyday application of operational principles and processes can help ensure that they don't become dated or irrelevant.
Start with bringing together all the key people at your company to talk about potential sources of risk, so there can be an integrated approach to manage them and you can have the reassurance that everyone is on the same page.
A college in California lives by this philosophy of risk that explains it best and can be applied to any business:
"When institutional assets are depleted by preventable loss, our educational mission is compromised."
In a climate of increasing public scrutiny and accountability, it's vital to be prepared and ready for uncertain times and have a way in which to deal with them.
Here's an infographic with 5 ways to manage your risk.
To learn more about how RiskWare is making the world a little less risky, visit us at RiskWare.com.au.