Good risk description is fundamental to effective risk management. A comprehensive set of risks should reflect the full scope of uncertainties that may affect your business. Having an unclear understanding of risk will severely effect your ability to manage resources and could reduce your chances of meeting objectives.
Having a clear understanding of the probability and impact of your risks helps you manage. and prioritise your resources efficiently. Incomplete risk assessments may leave you exposed to hidden or underestimated uncertainties.
Risks with clear ownership are more likely to be managed effectively. Where ownership is unclear or disputed, mitigation actions are less likely to be completed and overall exposure to risk will increase.
Action plans that are owned, proactive and specific are more likely to reduce your risk exposure. Active monitoring and appropriate resourcing of actions will reduce risk exposure further. Poor action planning will negate risk management efforts.
A structured risk review process is essential to ensure that all stakeholders are fully engaged in the risk process. Consistent reviews help maintain quality of risk decision making. Lack of discipline will result in a loss of momentum in your risk management process.
Risk register and tools
Clear and consistent information that is available to all provides a sound foundation for risk-based decision making. Appropriate choice of a risk management toolset will increase efficiency and effectiveness. Confused or inconsistent data will undermine confidence and contribute to poor decision making.
Appropriate risk management enables you to make objective decisions based on analysis and understanding of complexities. Decisions based on accurate information are more likely to lead to success. Poor decision making and communication can damage team morale and reduce the likelihood of meeting objectives.
Risk management should be a fundamental part of your management system. Only when fully embedded, will all the benefits of risk management be realised. Lack of senior leadership will undermine efforts made by the rest of the team.
Knowledge, skills and experience
Having the correct knowledge, skills, experience and specialism is fundamental to successful and effective risk management. Lack of training and guidance will cause poor process implementation and ineffective use of toolsets.