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How to Manage Risk? A Structured Approach

Updated: Jan 30

Welcome back to Brave Horizons!


I trust you've been thriving in the world of endless possibilities since our last exploration of "Cultivating a Balanced Risk Culture."

 

Let’s have a short recap of our earlier exploration:


Understanding Risks – A Recap

 

Now, let's revisit the fundamental concepts we explored earlier about understanding risks.


  • Identifying and Categorizing Risks: Regardless of your role, distinguish between controllable and non-controllable risks for a comprehensive understanding.

 

  • Unique Risk Profiles: Acknowledge that each individual, and by extension, each business, has a unique risk profile. Your risk appetite defines the boundaries of risks you're willing to take.

 

  • Decision-Making Complexity: Decision-making involving risks is not a simple task. It requires time, effort, and sometimes external support. Your brain, a formidable tool, plays a crucial role, but it has its limits.




Knowing your next steps
How to Manage Risk


Today, we delve into the intricate art of risk management with a focus on a structured approach that promises effectiveness without unnecessary complexity.

 

Managing risks is a universal challenge, one that each of us encounters daily, be it in our personal lives or while steering the ship of a business.

 

The key to responding effectively to risks lies in adopting a structured approach. No, it is not such a challenge for someone who is capable to run a business like yours. We need to only change our angle a bit while putting our risk manager cap on our heads.  Let's unravel the intricacies together.

 

1.     Keep it Simple but Comprehensive

 

As you step into the role of a risk manager, remember that simplicity is your friend. It's crucial to grasp risks thoroughly to assess how they relate to your business. Take the intricate aspects and simplify them into manageable parts, ensuring that the information is easy to understand and can be put into action.

 

2.     Consistency – No Cherry Picking

 

Consistency is the backbone of any successful risk management framework. Avoid the temptation to overemphasize or underestimate one risk over another. Treat each aspect with due diligence, ensuring a balanced and fair evaluation across the board.

 

3.     Useable and Relevant

 

A risk management framework should not be a theoretical document gathering dust on a shelf. It must be a practical tool that aids in running your business smoothly. Ensure that every component is not only relevant but also usable in real-world scenarios.


The Role of a Well-Crafted Framework

 

Life's challenges are diverse, and relying solely on individual capacities may prove overwhelming. A well-crafted risk management framework becomes your ally in confronting hurdles effectively. It provides a detailed roadmap, allowing you to define, refine, and improve your decision-making process.

 

Outsourcing Risk Management

 

For small businesses focusing on core activities, outsourcing risk management is a viable solution. Seek a reliable, high-quality service that not only enhances business performance but also offers sustainable solutions at an affordable price.

 

Ownership of the Decision-Making Process

 

Remember, as the owner of the process, your choices shape the flow of life, and decisions on risk-related subjects remain yours to make.

 

Have you already taken necessary actions, such as recognizing and identifying risks and listing those your business faces ?

  • Yes

  • No

  • Working on it



If you've already taken the necessary actions, have you considered what your next move will be?

  • Yes

  • No

  • Working on it



If you have already considered your next move, are you prepared to navigate the upcoming phases independently?

  • Yes

  • No

  • Not sure


In our next journey, we'll explore the intricacies of Risk Identification. Subscribe now to stay informed and join our community of curious minds on this thrilling expedition of risk exploration!


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