The Importance of Risk Management
Risk management is a process dedicated to identifying risks within a business and developing processes and procedures to mitigate potential situation.
An effective system helps maintain the safety of staff, whilst protecting business itself…Think of Risk Management as “Health & Safety” for business. We firstly need to consider why it is so important…What is the scope? Risk management involves identifying potential risks and hazards to staff safety and then put in place procedures to minimise those risks. This is vital to the well-being of your people. It also ensures the profitability of your business by reducing downtime and costly payments.
If we then take this concept to the overall business, consider key stakeholders and investors…the reputation of your business in terms of social media, and an increasingly litigious world. When considering new projects and ventures, reward must be matched against risk. By doing this, it also helps to plan in more detail, and make better decisions in terms of the feasibility of a project.
Step 1 involves assessing the risks and mapping out situations that could potentially cause harm to people or resources.
Step 2 involves conducting a risk assessment based on factors such as:
- The severity of the risk
- Whether any existing control measures are effective
- Actions needed to be taken to mitigate the risk
- How urgently the action needs to be taken care of
Step 3 involves putting controls in place to prevent the risks from happening and what to do if they do occur.
Step 4 comprises of reviewing the process to identify any other opportunities or risks that may have been missed.
Any business that does not think about the four steps is in danger of running the business with inherent risks…What are YOU doing!?
“You don’t have to believe in coincidences because they happen every day.The trick is to be able to discern when something is more than coincidence.” Glenn Jones