Risk management is meant to be an iterative process. Which means you have one desired outcome or goal and then you have a series of operational steps that you will repeat until you achieve your desired goal. The primary goal should always be to mitigate or eliminate anything that may negatively impact your overall business goals. So goals for revenue or expansion or increasing your brand’s reputation and awareness and anything that may affect that negatively is going to be considered as the risk.
So the Step one in risk management process is to identify all of those areas that may negatively impact your business, and they don’t have to be things like that I mentioned about, it can also be natural disasters , they are colossal risk management item that needs to be addressed and needs to be planned for. Because it can all come down to affecting your overall business goal. Once you identify all of the risks that you may face as an organization, you are going to take each one of those steps namely
2. Analyze & Prioritize
3. Plan for mitigating
- Review and improve.
Every time you start, move to step two once you identify over in step one and analyze and prioritize. Now you have to look into a graphical analysis of your problem that is the Impact against the probability. So let us take a natural disaster, for example, it has probability a low chance, but it could have a very high impact if it wipes out one department of your business or one region of your company. So you are going to want to plan for that accordingly. Anything that is considered the high impact and high probability need to be addressed first ad anything that has a low impact and low probability are going to be one of the last things you planned for and invest any part of your business budget into.
Once you have listed your priorities, we are going to step 3 to plan and mitigate. And it just that what it states, what are the steps you are going to take to either reduce the risk to where it is at an acceptable risk tolerance for your organization or how will you eliminate the risk potentially? You are going to want to decide based on the graph of impact and probability again.
Next thing that is most important that we do is to review and Improve the procedure or the product or the business strategy that we used until now. This step gets a higher weight as it helps in getting the reviews which help in improvement eventually. When managing this kind of situations we need to be very careful as it may have a reverse effect on us. Consulting some firms that have sufficient expertise in these things help us sustain under challenging times. Firms that are popular among Canada are Active Business Services or Active Energy which have experience of handling energy crisis for almost a decade.