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Risk Management: Managing the Unavoidable

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Learn to identify, evaluate, and manage business risks. Here's a presentation that explains how to use the risk matrix tool.

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Published in: Business
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  • Slide #6, very rightly says to not just take risk but manage them properly. No business can succeed without taking risks, although proper evaluation and management can help getting through the risk.
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Risk Management: Managing the Unavoidable

  1. 1. RISK MANAGEMENT: Managing the Unavoidable
  2. 2. A RISK is anything that can hinder or help an organization achieve its objectives
  3. 3. If it hinders, it’s called a THREAT If it helps, it’s called an OPPORTUNITY
  4. 4. What risks do you see here? LET’S SAY YOUR STARTUP CREATED AN AD-SUPPORTED APP THAT LETS THE USER SPOT THE NEAREST TOILET
  5. 5. THE RISKS CAN BE: CONSUMER PREFERENCE Consumers may find the app useful or useless COMPETITOR STRATEGY Similar apps may or may not be updated with new features HUMAN RESOURCES Team may be seriously or just halfheartedly committed to finishing the app
  6. 6. THE INEVITABLE PRESENCE OF THREATS AND OPPORTUNITIES CALLS FOR RISK MANAGEMENT. DON’T JUST TAKE RISKS, LEARN HOW TO MANAGE THEM.
  7. 7. HERE’S THE CYCLE TO REMEMBER RISK CONTROLRISK ASSESSMENT
  8. 8. RISK ASSESSMENT IDENTIFY: Recognize potential risks to be faced ANALYZE: Determine risk impacts on organization PLAN: Establish risk control measures
  9. 9. RISK CONTROL Implement: Perform risk-controlling strategies Monitor: Check risk status and execution of planned actions Improve: Enhance processes for better performance
  10. 10. RISK MANAGEMENT OFTEN COMES WITH A MATRIX BASED ON TWO CRITERIA: Source: BrightHubPM LIKELIHOOD OF OCCURRENCE : Probability of a risk CONSEQUENCES : Extent of damage caused
  11. 11. LIKELIHOOD OF OCCURRENCE DEFINITE : Most likely to cause a problem LIKELY : 60-80% chance of occurrence OCCASIONAL : 50/50 probability of occurrence SELDOM : Low probability of occurrence, but can’t be completely disregarded UNLIKELY : Less than 10% chance of occurrence
  12. 12. CONSEQUENCES Insignificant : Damage is negligible Catastrophic Marginal Moderate Critical : Damage can halt productivity : Damage is not significantly serious : Damage is significant but not severe : Damage can lead to serious loss
  13. 13. EACH RISK WILL FALL UNDER ONE OF THESE CATEGORIES Should be addressed on a high-priority basis Could be addressed to improve overall performance, but may be ignored without damage LOW MEDIUM HIGH EXTREME
  14. 14. WHAT A RISK MATRIX LOOKS LIKE For more on risk and how to use the risk matrix, visit BrightHubPM Definite Likely Occasional Seldom Unlikely Insignificant Marginal Moderate Critical Catastrophic Likelihood Consequences High High Extreme Extreme Extreme Moderate High High Extreme Extreme Low Moderate High Extreme Extreme Low Low Moderate High Extreme Low Low Moderate High High
  15. 15. “Risk is like fire: if controlled it will help you; if uncontrolled it will rise up and destroy you.” Theodore Roosevelt
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