Principles of Risk Management
What Can Go Wrong, Will Go Wrong.
Why should we do (XYZ) Risk Mitigation action?
...General Principles for a Risk Management Team (RMT) when making decisions.
Summary of Risk Assessment & Management
Comprehensive risk assessment is most effectively accomplished through a systematic process that begins with addressing a risk event itself, then considering candidly what might cause that event to take place (all causes, as thoroughly as possible), followed by an assessment of all potential consequences (both positive and negative) if the event were to take place. After that, comprehensive risk mitigation strategies are formed and implemented.
What Can Wrong, Will Go Wrong
Keep in mind that in a crisis, it seems that everything that can go wrong usually does, and things unforeseen that are negative will happen. Crisis preparation allows there to be procedures and plans in place that are adjusted as the crisis is experienced. Risk mitigation prepares specifically and generally for as many eventualities as possible. While we prepare, we also remain flexible in risk, adjusting our mitigation as our assessment changes.
Additional Principles that may apply:
The best mitigation strategies mitigate multiple risk events. Mitigation is both preventative and reactive. Reaction time has been listed as a factor in influencing the positive outcome of risk events. Statistics indicate that a quick response in crisis limits the impact of the crisis.
1. Risk Flexibility
Effective crisis response is a positive factor for mitigating the consequences of a risk event. While one risk mitigation technique may do little in the way of prevention of that risk but it has significant value in maintaining a system of interdependence and communication that will be relied upon when responding to a crisis, then perhaps that technique should not be discarded. This is referred to as risk flexibility. Risk Flexibility means I can use one technique for a multiplicity of risk events, and can discard it when it no longer has significant value. Having pre-existing practices in place results in better response in crisis – people already know one helpful action to take.
2. Increased vigilance is beneficial for mitigating against many of the risks.
Perhaps a specific risk mitigation technique that is performed daily is a reminder that one is to remain attentive to the variety of threats that exist in that environment. In that environment, it is important to not relax or get “numb” to the appropriate level of vigilance and situational awareness required.
3. Risk mitigation options should never be viewed as an “either/or” dilemma.
Rather, redundancy in risk management is a desirable goal. Would I rather have the lock on my gate or on the front door? I’d rather buy 2 locks (we did). It may be an unacceptable risk to consider one risk mitigation technique as the only resource that is being depended upon.
4. Mitigation efforts that are too costly with only minimal benefit should be abandoned.
“Costs” of mitigation does not just mean financial. It includes stewardship of all aspects in risk. If the risk mitigation technique requires excessive energy, annoying personal interruption, expensive infrastructure, cumbersome processes, etc. and the benefit is proportionally nil, then it is wise to discontinue the practice. Again, this speaks to Risk Flexibility above.
5. Risk management should be scaleable to the dynamic risk environment.
This is referred to as risk agility. A community’s mitigation approaches are boosted with staff buy-in. Buy-in is not the same as agreement, but is more reflective of a general confidence in the process of decision-making. When buy-in does not exist, the associated group accountability may deteriorate or worse – some may opt to undermine the mitigation efforts.
6. Enduring well in risk is enhanced when feelings of resignation and isolation are decreased. When a field-team agrees to a specific risk mitigation practice, it gives each individual and the whole group a sense of controlling what can be controlled, the feeling that "I am not alone in this,", and an increase trust of teammates. The feeling of resignation and isolation are two extremely dangerous attitudes in risk.
7. Us-Them Attitude is Dangerous.
When communities in high risk divide into various camps and make decisions purely motivated by their own interests, without sensitivity to their impact on others, it decreases risk resiliency drastically. That environment is actually more dangerous.
8. Fog of War
One of the realities of the high risk situation is that it is confusing – there is the “fog of war.” Leaning into that fog to seek clarity for how to manage risk demonstrates wisdom. Having conversations about the current risk mitigation plans and habits in place are incredibly helpful to increase trust and awareness of what should be done right now. Doing both Risk Assessment and Risk Mitigation takes a lot of energy.
Feel free to contact Neal or me if you are part of a Risk Management Team or are on the field as a single unit without a team and would like to discuss any of the above.
