Risk assessment. Look before you leap! Part 1

Did you know that there is some level of risk in virtually everything we do (or choose not to do)? Risk is inescapable. It’s part of life’s journeys.

Interestingly, some risks are small (and no big deal): like getting a “No” answer from a business prospect or not finding your favourite dish on the menu at the restaurant. Some risks are mid-size and endurable: like not getting asked out on a date, being passed over for a salary raise at work, or missing out on your target marks at school. While other risks are large (and devastating): loss of a job, fatal accident, or death.

But things can be better. Before engaging in risks with potentially fatal consequences, there’s the option of conducting a “Risk assessment”. Conducting a risk assessment is simply asking, “What could go wrong?” Conducting a risk assessment is necessary – and rational. During a risk assessment, potential risks are insulated to ensure that the odds are stacked in favour of success.

None of us can predict tomorrow with bull’s-eye accuracy. But no matter what risks lie ahead, know this: Conducting a risk assessment is critical to managing risk that lies on the horizon!

Risk assessment: Identification, analysis, and evaluation

Risk assessment is simply the process of identifying analysing and evaluating risk factors associated with a particular action or event. Risk assessment involves risk identification, risk analysis, and evaluation.

Risk identification:

Have you ever thought of the fact that when you open up to a new friend, you immediately have a potential enemy? That when a lady conceives, there’s a risk that they may end up with a miscarriage or die during childbirth. If you have, then you have engaged in risk identification. For every action, there is always some level of risk. Risk identification aims to generate a comprehensive list of material risks that might create (or prevent), accelerate (or delay) the achievement of objectives.

Comprehensive identification is critical, because a risk that is not identified initially, will not be mitigated. During risk identification, you focus on possible outcomes. Take an example of moving out of a house for a walk:

What could happen? E.g Loss of a limb
To what? E.g yourself
How could it happen? E.g get knocked by a bicycle
Where could it happen? E.g on the road
Why might it happen? E.g rider’s poor road usage
Who can influence this event? E.g Potholes
What can we do to prevent it? E.g use a different route!

To be continued in Part 2

 

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