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BSBRSK401A Identify risk and apply risk management processes vers 0.1.pptx

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Presentation I put together from Diploma of Building and Construction (ManagemenT) program

Presentation I put together from Diploma of Building and Construction (ManagemenT) program

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  • 1. IDENTIFY RISK AND APPLY RISK MANAGEMENT PROCESSES h"p://www.flickr.com/photos/cswc/6552142213/  
  • 2. Unit Competencies BSBRSK401A Identify risk and apply risk management processes Identify risks Analyse and evaluate risks Treat risks Monitor and review effectiveness of risk treatment/s h"p://www.flickr.com/photos/sportrait/3393579769/  
  • 3. Learning Objectives At the conclusion of this module, you will be better able to: Identify risks in a diverse range of organisational activities Develop collaborative strategies to evaluate and mitigate risks Implement continuous improvement processes to deal more effectively with identification, analysis and mitigation strategies for organisational risks h"p-­‐//www.flickr.com/photos/ter-­‐burg/8127175006/   h"p://www.flickr.com/photos/leehaywood/4215672566/  
  • 4. It can be a Risky Business Sometimes h"p://www.flickr.com/photos/geoliv/11313734716/  
  • 5. RISK is the possibility of events that may impact organisational objectives
  • 6. h"p://www.flickr.com/photos/elvire-­‐r/2451784799/   You cannot live your life without risks
  • 7. Some pay off – big time!!!! h"p://www.flickr.com/photos/geishaboy500/3994803605/  
  • 8. Whilst others – not so well!!!!! h"p://www.flickr.com/photos/darrenkw/7728088440/  
  • 9. LIFE cannot be lived without risk
  • 10. h"p://www.flickr.com/photos/foshydog/4780493128/   We are all Risk Managers
  • 11. h"p://www.flickr.com/photos/ejazasi/253032421/   Sometimes we understand and accept risk
  • 12. h"p://www.flickr.com/photos/dvids/2881216357/   At other times we take large precautions
  • 13. Despite our efforts it remains impossible to ELIMINATE EVERY RISK
  • 14. RISKS are everywhere Health and wellbeing Job security and payments Financial arrangements Relationships Natural disasters Rules and regulations Deliveries and traffic Disease and accidents Misadventure and crime Infrastructure failure ………………… ………………… …………………
  • 15. Identifying Risks h"p://www.flickr.com/photos/geoliv/11313734716/  
  • 16. h"p://www.flickr.com/photos/12023825@N04/2898021822/   You need to look for risks
  • 17. Look for risks to your STRATEGIC PLANS
  • 18. Look for risks to your OPERATIONAL PLANS
  • 19. Organisational risks generally relate to FINANCIAL OPERATIONAL & ENVIRONMENTAL External risks such as interest rates, commodity prices LEGAL Internal risks such as customer payments, cash flow, asset depreciation STRATEGIC PRIVACY & INFORMATION
  • 20. Organisational risks generally relate to FINANCIAL OPERATIONAL & ENVIRONMENTAL LEGAL STRATEGIC PRIVACY & INFORMATION Risks such as illness, retirement, staff turnover, equipment breakdowns, systems failures, natural disasters
  • 21. Organisational risks generally relate to FINANCIAL OPERATIONAL & ENVIRONMENTAL LEGAL STRATEGIC PRIVACY & INFORMATION Risks such contract disputes, non compliance with legal requirements (WHS standards, FairWork Aust, etc)
  • 22. Organisational risks generally relate to FINANCIAL OPERATIONAL & ENVIRONMENTAL LEGAL STRATEGIC PRIVACY & INFORMATION Risks such as changes in customer demand, increased competition, new technologies and business development opportunities
  • 23. Organisational risks generally relate to FINANCIAL OPERATIONAL & ENVIRONMENTAL LEGAL STRATEGIC PRIVACY & INFORMATION Risks such as noncompliance with state and national privacy laws on recording, storing and disposing of customer information
  • 24. h"p://www.flickr.com/photos/sonson/422595428/   Brainstorming sessions
  • 25. review your business plan and ask as many WHAT IF? questions as you can
  • 26. Flow charting to remove gaps and overlaps h"p://www.flickr.com/photos/jpaxonreyes/6284836564/  
  • 27. Analyse a wide range of possible future events and their outcomes SCENARIO ANALYSIS economic, political, legislative and operating scenarios
  • 28. h"p://www.flickr.com/photos/betobaibich/206960384/   Get out of the office and observe Ask questions and listen to people What are they thinking? YOUR TEAM CUSTOMERS SUPPLIERS COMPETITORS NETWORK
  • 29. When, where, why, and how are risks likely to occur in this organisation? Are the risks internal, external or random? Who might be involved or affected if this occurs?
  • 30. ISSUES ARE NOT RISKS …but failing to address them may be VERY RISKY
  • 31. Analysing Risks h"p://www.flickr.com/photos/geoliv/11313734716/  
  • 32. What is the likelihood? What is the predicted outcome?
  • 33. 1 VERY LIKELY 2 LIKELY 3 UNLIKELY 4 HIGHLY UNLIKELY (could happen frequently) (could happen, but not frequently) (could happen, but only rarely) (could happen, but probably never will)
  • 34. 1 CATASTROPHIC 2 MAJOR 3 MODERATE 4 MINOR (may ruin the organisation) (business plans may fail) (plans may need to be modified ) (can be absorbed - inconvenient)
  • 35. 1 ENORMOUS 2 MAJOR 3 MODERATE 4 MINOR (may transform the organisation) (may transform a department) (may exceed business planning) (swings and roundabouts)
  • 36. Risk Number Very Likely (4) Likely (3) Unlikely (2) Very Unlikely (1) Catastrophic (4) High (16) High (12) Medium (8) Low (4) 11+ Urgent Remedy Major (3) High (12) Medium (9) Medium (6) Low (3) 6 – 10 Needs Action Moderate (2) Medium (8) Medium (6) Low (4) Low (2) 1–5 No Action Minor (1) Low (4) Low (3) Low (2) Low (1)
  • 37. h"p://www.flickr.com/photos/dtpancio/7443265772/   We all have our own biases – but you must deal with the facts and remain objective
  • 38. h"p://www.flickr.com/photos/bilfinger/8271241613/   Who needs to to be involved? Who needs to be consulted? Who needs to be informed?
  • 39. What stakeholders need to be involved in assessing the risk Interest levels Subject matter expertise Those involved in the activity Those that may be impacted downstream Those that are upstream that may need to adjust
  • 40. Your team Other departments Customers Suppliers Consultants Statutory bodies Industry groups
  • 41. Consultative risk analysis Delivers far more predictable outcomes
  • 42. h"p://www.flickr.com/photos/eirikso/2217301198/   I hadn’t been paid for two years of work in starting Flickr, and we were running out of money. The only guy getting paid on a consistent basis was the guy with three kids. We mortgaged our house to put money back into the company. So it was both a personal and professional risk. It could have gone either way.
  • 43. Less than six months after mortgaging their home Caterina Fake and her husband Stewart Butterfield (Flickr co-founders) SOLD FOR $50M Happily – they were able to repay their mortgage
  • 44. h"p-­‐//www.flickr.com/photos/osde-­‐info/5598738692/   Apple have sold more than 84 million in 3 years
  • 45. h"p://www.flickr.com/photos/newtown_grafiO/4843514662/   Tablets have become a huge market People have often queued for hours Demand has, at times, outstripped supply
  • 46. Many industry analysts predict tablets to “take over” from desktop and laptop computers Microsoft was so confident about the market sector that it developed the “Surface” tablet Risking significant damage to relationships with it’s traditional hardware partners
  • 47. h"p://www.flickr.com/photos/13815526@N02/7796228354/   In July 2013, Microsoft announced a $900M write-down for unsold stocks
  • 48. h"p://www.flickr.com/photos/g_jewels/4465732486/   Historical information can provide great insights into “What might go wrong”
  • 49. Managing Risks h"p://www.flickr.com/photos/geoliv/11313734716/  
  • 50. Risk Number Very Likely (4) Likely (3) Unlikely (2) Very Unlikely (1) Catastrophic (4) High (16) High (12) Medium (8) Low (4) 11+ Urgent Remedy Major (3) High (12) Medium (9) Medium (6) Low (3) 6 – 10 Needs Action Moderate (2) Medium (8) Medium (6) Low (4) Low (2) 1–5 No Action Minor (1) Low (4) Low (3) Low (2) Low (1)
  • 51. Organisations take steps to MANAGE RISKS that they assess as requiring attention
  • 52. They establish CONTINGENCIES for instances that the risk may occur
  • 53. They conduct regular AUDITS To ensure they are complying with proper standards
  • 54. FINANCIAL RISK is often managed with insurances or guarantees many organisations look to assign to or share risk with others
  • 55. WORKPLACE SAFETY has a very strong process following “Hierarchy of Controls”
  • 56. Adopting processes and training & development to ensure team members are competent and informed
  • 57. Governance processes to ensure issues dealt with at the right level Procurement processes that include “rise and fall”, alternative suppliers enforceable terms and conditions Marketing resources keep connected with customer needs and trends Relationships that focus on innovations and technology Business systems that protect and back-up valuable data Disaster recovery plans
  • 58. RISK REGISTERS are designed to maintain a list of all known risks and their respective treatments
  • 59. CONTROL MEASURES are the measures that need to be designed or established to validate the effectiveness of the treatment
  • 60. h"p://www.flickr.com/photos/zengei/6957553864/   Hard measures are the most reliable
  • 61. h"p://www.flickr.com/photos/jansco"nelson/3364705313/   Soft measures need to be interpreted
  • 62. h"p://www.flickr.com/photos/look_ma_im_flying_pictures/3714888958/   Without effective measures How will you know what to look for? How things are progressing? When to make adjustments
  • 63. We need to set measures for the COST OF RISK TREATMENTS and PREDICTED BENEFIT
  • 64. In 2010, volcanic ash from Iceland cost the airline industry $3.6b How could they have better managed the risk
  • 65. Monitor Risk Management h"p://www.flickr.com/photos/geoliv/11313734716/  
  • 66. Are the risk treatments working? are they having the desired effect? are there impacts that were not considered? are there adjustments that are required?
  • 67. h"p://www.flickr.com/photos/cuckove/3307152002/   Things can change VERY RAPIDLY
  • 68. h"p://www.flickr.com/photos/theaterculture/3789545290/   The butterfly effect
  • 69. h"p://www.flickr.com/photos/theaterculture/3789545290/   What impacts may occur? There may be downstream impacts that you didn’t consider   THE BUTTERFLY EFFECT
  • 70. Review all risks regularly Risks not considered to be serious enough to manage can become high priority when circumstances change
  • 71. How are we tracking on the cost of the risk controls? Are the agreed controls providing the predicted result? Do we need to make adjustments?
  • 72. h"p://www.flickr.com/photos/jugrote/2296138797/   WHEN THINGS ARE NOT GOING AS PLANNED DON’T PANIC!!! STAY OBJECTIVE & WORK THROUGH THE PROBLEMS – DON’T MAKE THEM WORSE
  • 73. Reviewing Effectiveness and Learning Outcomes h"p://www.flickr.com/photos/geoliv/11313734716/  
  • 74. DEAL WITH FACTUAL INFORMATION FIRST Only when you have all the facts do you commence interpreting
  • 75. Did we execute what we planned? What changed and why? What did the risk treatments cost? Did the treatment deliver the anticipated result? What were the unintended impacts?
  • 76. Did we identify the correct risks? Did we analyse them properly? Did we get the right stakeholders involved? Were the risk treatments appropriate? Did we manage the process effectively?
  • 77. Identification Analysis Treatment Management
  • 78. What have we learned? What do we need to do differently next time?