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The Don'ts of Risk Management

business man running through glass wall
 
If you are an inexperienced project manager, there are risk management facts you don't want to learn the hard way.
 
Perhaps the most important thing about risk management is not skipping steps to save time. There is absolutely no easy way out of risk management. You should never take the probability and impact assessment of risks lightly.
 
If you are hoping to undertake adequate risk management, there are a couple of don'ts you should know about.


Don't become obsessed with risk management

Risk management should not overshadow the actual work that has to be done. Fact remains, risk management increases the chances of your business continuity but it does not determine its success. Hard work and wise business strategies do that.

If you are oblivious of that fact, you can soon find yourself chasing irrelevant risks and overload your system with risk management strategies.

There is no such thing as low risks

A risk is just as its name suggests, a risk: an event occurring that could prove to be harmful for your business.

Risk management takes into consideration all possible risks, obvious or latent. The only criteria that differentiates between the vulnerabilities of your project and determines your risk tools is the severity of the risks you identify in your risk management plan.

The terms high, medium or low should only be used for you to allocate the risks slots in your list of risk management priorities. There is no risk you can afford to ignore completely.

Don't assume you have all the risks covered

There are some risks which you can identify at the very beginning of your risk management plan but these are not all there is to it. Throughout the life cycle of your business or project, you will consistently identify risks. Risk management is tricky business and you need to stay ahead in the game.

Impossibilities do not exist

You should take this in consideration when devising your risk management plan. 'That will never happen!' Too often we hear that when dealing with clients that come to us for the design of their risk management plan.

That is a fatal mistake.

While it is true that some events have a lower probability of occurring than others, you should not let politics and ego dictate your risk management decisions. It is better to be safe than sorry. Just because you control something, it does not mean that bad things can't happen.

Risks don't take turns

Risks do not always come one after the other at a manageable pace. Risk management should consider the possibility that two or more things things could go wrong simultaneously. History testifies that almost all major business downfalls involved multiple failures in the operational risk management.

ClearRisk's cloud-based Claims, Incident, and Risk management system allows organizations to better control their risk management activities. We are proud to help our customers introduce new risk management initiatives and lower the cost of risk. Want more information?

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