The Most Important Risk Management Concept


For several years I have been teaching introductory risk management concepts to people who are not risk management professionals. These training delegates come from different sectors and industries, and they have varied levels of professional experience, but the two most common shared reasons they are attending these sessions are firstly, that they are moving into positions at work where they will be required to start considering the idea of risk in a structured way or secondly, that they have a requirement to complete some kind of formal risk assessment process as part of their work, and would benefit from understanding some of the concepts that underpin the risk assessment process a little better.

If the size of the audience and the dimensions of the room allow it, I’ll normally start these sessions by asking who in the room has previously done any risk management or thinks that they have.

I’ll do this first through a quick show of hands, and then I’ll ask a few of the individuals who answered positively if they would be willing to describe the types of risk management they have done in the past, and in particular the last time that they remember having done some.

Of course different audiences respond differently to these questions and, as anyone who has been an educator at any level will recognise, some groups are far more willing to engage and contribute than others.

However usually in any given session about a quarter to a third of the delegates will affirm they have done some kind of risk management in the past, and when encouraged to describe specific examples they will usually start by talking about times when they have had to make or participate in the development of some kind of formal risk assessment.

Often these will be instances when they have participated in the planning process for a specific project or assignment, and the examples will involve occasions where there was some kind of new activity or something that was a little outside of the scope of what they considered to be their normal duties.

Situations requiring a conscious process of additional analysis, review and in a practical sense also some administrative paperwork to complete both organisationally and as individuals. The novelty of the situation and additional administrative steps making it quite clear to them that they were actually doing risk management.

It’s always interesting to hear about new and different examples of risk management being done in this type of formal, structured way; and the examples I have heard have included someone tasked with looking at the environmental implications of a engineering project, an administrator who drew on her experience as a student society leader where she was required to present risk assessments to her university to receive funding for some foreign trips she had organised, and a journalist who had analysed the risks associated with a long-term investigative story that their news channel had been planning.

Much less frequently they give the types of answers I am really hoping to hear, which for the purpose of these sessions are examples which connect experiences from day-to-day life with the concept of doing risk management. To illustrate what I mean by this here’s three good ones that delegates have shared in the past:

I cycle to work so I think I do lots of risk management every day even before I get to work”.

I had to give a presentation last week, so I did a lot of practice because I didn’t want to mess it up”.

I’m not sure if this is what you are looking for but anytime I go anywhere with my four-year old daughter I am always thinking about what she is doing, and what she might be about to do next”.

In these examples the delegates were showing that they understand the risk management is not just a formal, professional activity that we only do when we are obligated to, but something that we do in a practical way all the time and in almost every aspect of our lives.

We consider the things that are valuable to us, (which in this these examples would be our health, our career and our children’s welfare), and we choose to take or not take certain actions according to whether we think they will effect these valuable things in a positive or negative way.

So if you are regularly cycling in a busy city and value your physical health amongst many other safety measures it is highly advisable to be very aware of the other road users and what they are doing in order to reduce the chance of you being involved in an incident that could harm your health. If you have an important presentation where there is both the potential threat of career harm if you deliver it badly, and the potential positive opportunity of recognition and career progress if you deliver it well, it makes a huge amount of sense to prepare effectively.  

And that’s probably the most important concept to understand about risk management, for all the technical detail and process that some types of professional risk management involve, it is ultimately about understanding four things: what is valuable to us, what bad or good outcomes could occur to those value things, and what measures we can take to make these outcomes more or less likely, depending if they are good ones for us or not. 

When you see how risk management can be applied in practical sense to everyday life, every time you cross a street, brush your teeth, drive, choose what to eat and choose what to wear, you quickly realise that not only can anyone do practical risk management, it also makes it much easier to see how it can be applied in a wider organisational context.

Likewise if you already get it from a business perspective, and understand how to apply risk management ideas in a professional context hopefully you can also see how actively applying some of those of the same key ideas in a more practical or informal way to other aspects of live could help you get more of things that you want in life and less of the things that you don’t. And who doesn’t want that?