What is risk management?
Despite referring to millions of websites and documents that talk about risk management, I would like to try to give you a simple perspective from a person who has to deal with the risks from day to day with high risks. This is real risk management, by hand.
Of course, "risk" and "risk management" vary according to the same general meaning, depending on which circumstance or relationship they apply, but in principle all risk management follows more or less the same process.
So, what's the risk? Risk may have any influence on the expected or planned outcomes that will change your income. There is anything in the psyche that can prevent you from getting what you want or expecting.
Here's an important note: the risk has not yet occurred. If your income has changed because of the "occurrence" risk, you no longer have the risk, you have a problem, and you have to deal differently.
So basically – Risk is something, anything that can happen, affecting or changing the desired or planned outcome. There are so many different ways to say this, as simple as the concept, can be confusing. Let me give you an example;
"If it's all day, then you have to end the excursion" – the risk is that it falls. This has the effect of eliminating the planned trip. Risk management recognizes the risk potential analysis of its likelihood and effect, or alleviates it, or creates alternative options that allow the original plan to succeed.
Risk Management 101
In some of my projects in Asia, I had to seriously consider the impact of rain on the project's result. In Korea, I was in Seoul at a workplace where we had a limited time to move the banks. a new building from an old building that was sold. The owner of the old building announced bankruptcy and sold the office building. The new owner, the government will soon kick everyone out. We had three months to find, build and move a new building, 200 staff, including 120 trading positions.
This really test my team about the risk management ability. This was a working business, the only window to move 200 staff on a weekend – after trading stopped on Friday night and before it started Monday morning. Find out what Typhoon is, and for those who do not know things work in Asia – the Typhons receive alerts as they approach them.
Each signal indicates the "threat" level and / or the likelihood of direct strike. As the signal intensifies the threat (and the danger to life and property) is approaching and public services stop. People are told to go home or stay in the streets and stop for a few hours to several days.
I have a stressful time on the clock. The decision to push the move to the old office or to continue and hope we've achieved everything before the typhoon hit a 15-minute review every 15 minutes this weekend. This was risk management, as it had never been before. Risk management is critical to project work.
What is risk management?
So, what's the "risk" meaning, I hope it will be graphically clear now …? Risk management is a process of risk management as it relates to certain circumstances. The techniques, tools and processes used for risk management are fairly pragmatic and have common sense. But we all know that there is no "common sense", so the best solution under risk management is to learn some of the best practices based on industry-proven templates and methodologies.
I'm not here to create a method or good practice against the other. Based on my specialists and experiences, I have personal preferences, but I know and see that many other project managers use different techniques and tools in Risk Management, all of which are valid and most of them work efficiently.
In the follow-up article, we are talking about project risk management. I will share some templates and examples, and hopefully some discussions will arise. No one is the best way to risk management, but there is a consistent framework that needs to be followed and there are very good industry standards in the Risk Management Space.
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