Risk Management
Risk Management
Risk Response and Rescue have been helping people who manage operational environments improve their risk management process since 1998.
Strengthen your internal capabilities in safety and emergency management with a risk management plan that includes:
- Reviews, Simulations and Audits of Safe Work Practices
- Risk Assessments and Protocol Development
- Emergency and Crisis Management Procedures
What is Risk Management?
Risk is the probability that something negative may happen and the resulting consequences if it does happen. The purpose of a Risk Management Plan is to identify, assess and control threats to an organisation or operation.
To some, this may sound negative, but the risk management process is essential and preventive, enabling an organisation to be proactive rather than reactive towards crisis and threats to its existence and success.
Setting up a plan for risk and security management when issues arise requires planning and forward thinking. This involves time, rather than expense and is best conducted and implemented gradually, with the support of training. In this way, the policy will be well received and procedures observed by all affected and involved. Further ongoing commitment is needed in terms of regular reviews, to ensure the plan is up to date and policies and procedures are adapted for any changes that may have occurred.
Risk Management Assessment
The first step in any risk management plan is to identify potential threats to your organisation through a risk assessment exercise. These can involve anything that will have a negative effect on operations and can vary greatly in scale and severity. Threats may originate from internal or external sources, across operational, strategic or financial bases, or from hazards.
Some examples of risks to an organisation include:
- natural disasters
- accidents
- security breaches
- legal issues
- mismanagement
- environmental considerations
- financial problems
- technology failures
- equipment faults
- compliance challenges
- strategic matters
- health and safety emergencies
- reputational compromise
- economic emergencies
- operational crises
The amount of risk your organisation can handle varies according to factors specific to your operation. Often some level of risk needs be taken for success, however, too much risk or exposure to the wrong type of risk can be harmful.
Also, facing risk is costly to an organisation. Unplanned events can have disastrous effects on timing, finances and reputation. A solid, well considered risk management plan helps mitigate all of this and reduces stress and worry, allowing for trouble-free operation. One caution, however, is that overestimation of risks might cause overreaction and panic which can also be harmful, so it is important to conduct risk assessment in a calm, methodical way. This is where the professional input and assistance of a risk management consultant, like Risk Response and Rescue, can be extremely valuable.
What is a Risk Management Plan?
A risk management plan details strategies to counter relevant risks and help reduce the potential impact of these threats on operations.
There are several methodologies for compiling your plan, detailing the risk management process in 5 steps, 4 steps and even a 7 step plan. Here are the main actions needed:
- Identify
- Assess
- Manage
- Monitor and Review
1. Identify
It is not easy to identify threats in order to make a risk register. They can be difficult to spot, being less obvious potential issues or events beyond your control. Here are some ideas to help develop your risk management framework:
Ask the questions: ‘what if?’, 'what can go wrong?' and ‘how will this affect operations?’
Check safety records, past problems and previous issues and complaints.
Look at external risks, brainstorming scenarios and drilling down to the root cause of the consequences.
Trust your intuition, even in identifying unlikely scenarios that could in fact happen.
Use risk management tools, templates and pdfs such as SWOT Analysis, Failure Mode and Effects Analysis, PMESII-PT, PEST Analysis and Scenario Analysis.
Evaluate individual risks to all team members to whom you have a duty of care and legal obligation to protect.
Consult experienced industry professionals such as Risk Response and Rescue.
2. Assess
All identified risks need to be assessed in order to analyse and prioritise them. A risk can be assessed by its frequency, or probability of happening, and its severity, or the consequences. Look at how likely it is that the threat will take place and how impactful it will be when or if it does happen.
A Risk Analysis Matrix can be used to assess the level of risk and a Heat Map or Risk Map may be created as a visual tool, to assist. Threats range from unlikely to happen, with only low impact, to extremely likely with high impact. You can also use a Risk Impact/Probability Chart to assess risk. This will help you to identify which risks you need to focus on.
Plotting the risk landscape in this way helps to show priorities and, consequently, to identify where time and resources should be spent in order to manage each threat.
3. Manage
Knowing its level of risk, each threat must be examined and alternative solutions devised regarding the best way to manage each situation, in terms of cost and effectiveness.
Risk management could involve developing procedures to prevent or reduce the likelihood. It may also include policy changes and special training courses, record keeping or introducing and maintaining additional equipment. A risk management project might be set up to simulate the action of the threat in a controlled environment in order to reveal the issues its consequences would generate and to help with devising realistic preventative measures.
There are 4 key ways to manage risk:
A. Avoid – switch to a less risky option which does not have this risk attached to it.
B. Control – reduce the impact of the risk by mitigating it or making it less likely to happen.
C. Transfer – hand the risk over to a third party, for example insurance or professionals.
D. Accept – if there is no other option, let it happen and instead focus on dealing with the consequences.
The risk management process involves deciding which action achieves the best outcome for each risk and setting up a plan to implement that solution should the risk arise.
Once all risks have been managed, the risk management plan outlines how resources are to be organised in the event of a crisis, according to all the risk management activities and initiatives. Details of people, money and support needed to implement the plan are listed, the plan is approved and training is implemented.
Risk Response and Rescue can assist with your risk management process, either as consultants and facilitators, or by providing skilled personnel who are highly experienced in high-risk operations. These people are trained in providing solutions to mitigate risky situations and protection of people and assets.
Also, Risk Response and Rescue run many training courses to arm people with the skills to cope in risky environments. Government funding is available for participants on many of our courses so ask us today about our courses and the opportunity to skill your staff and employees in preparation for managing risk.
4. Monitor and Review
Since risk management is an ongoing process, rather than a once-off project, it is vital to conduct a regular review of the plan. Risks change, over time, as do processes, people and equipment. Checks are needed to ensure the planned risk controls are still current and effective, or whether they need to be updated. In some cases, completely new strategy may be required.
As well as re-visiting the crisis plan, ongoing training and raising awareness of risk management protocol is generally good practice. This works towards developing a risk management culture in your organisation due to increased knowledge of processes and equipment, making informed decisions on the basis of risk and return.
A current, comprehensive risk management plan embedded in your organisation culture makes entities more resilient, adaptable and reactive, as well as reducing costs and waste in your operations. Smarter, safer ways of thinking and operating means better bottom line results in both dollars and lives.
Risk Response and Rescue has been delivering risk management advice and training to the world’s riskiest businesses since 1998. Our territory reaches deep underground to the top of mountains, spanning oceans, outback and deserts.
We enable you to embed high levels of safety capability in your organisation through:
• specialised advice
• practical training
• the right equipment
• strong support from experienced, operational safety and emergency response professionals.
Make your operational environment safer and maximise your Risk Management capabilities with Risk Response and Rescue today.