When using Active Risk Management (ARM) it is very easy to spend TOO much time and attention managing risks. By using the Pareto Principle to prioritize how you response to identified risks, you can assure your risk management efforts yield more benefit than they cost—in a simple, easy-to-understand manner…
Risk management is more than just risk mitigation
There are four different techniques to manage identified risks. Some try to prevent them from occurring; others deal with the consequences if they do occur. Too few people realize that they have this many tools at their disposal. As a result they do not manage risk as effectively as they would like…
RIPping up risks to figure out which are largest
It is very easy to get so caught up in analysis paralysis that you never get around to actually responding to your identified risks. Estimating them instead provides a quick, low-cost way to figure out how big each of your risks are relative to each other. Risk estimation is easy when you remember that risk consists of two components: impact and probability—each of which has a simple proxy for quick estimation…
Looking for risks in all the places they can occur
To actively manage risk across your enterprise, you will need develop an organization-wide consistent method to seeking out and identify risk. This requires two critical steps: 1) develop a clear definition of risk enterprise-wide and 2) teach your staff to seek out and plan for all types of risk: positive, negative, internal and external. Once you do this, you will be ready to begin planning for and managing response to nearly any situation of importance that is likely to occur…
Creating to a culture that enables active risk management
Before any organization can begin to actively manage risk, it must first change its culture to one that openly and freely discusses risk at all levels. This is not easy. It requires commitments from management and staff at all levels. However, it will pay off in many ways: higher trust, increased respect and better results…
ARMing yourself for success for the new year
Today is the first day of 2010. This year, as we exit a global recession our hopes for success are much larger than before—while our margins for success are tighter than they have been for many years. Use of Active Risk Management (ARM) can be vital helping us navigate these challenges…
