When you’re in the field of risk management, you’re dealing with uncertainty. That’s probably why it’s difficult for some companies to really embrace and focus on risk management as a path to success. However, we do know for certain that risk management has worked in the past, and there are lessons in that for us.
Conduct a risk assessment now
Do your risk assessment upfront. Obviously, to mitigate risk you want to assess what the risks might be before they happen. Because you cannot possibly anticipate all risks upfront, revisit your list and find new ways for mitigation.
Take ownership: Lessons from the 2012 London Olympics
In order to host the 2012 Olympics, London was in need of some highway infrastructure upgrades. They needed to widen and refurbish a 117- mile stretch of the London Orbital Motorway (M25) that encircles most of greater London. It was a large project with huge implications that needed to be completed in a very short time-frame. The risk and rewards were massive.
The project was completed 8 weeks ahead of schedule and won many awards, with help, in no small part, from the risk management team. Here’s what we can learn from the M25 project:
To gain a better understanding of the overall and largest risks to the project, a risk management application was used. Risks were broken down on several spreadsheets to allow certain people to take responsibility for specific items, but a macro view of the largest risks and the ones that affected the overall project was heavily relied upon.
While the focus remained on the big picture, segmenting the list allowed team members to take ownership of their own piece while understanding how their piece fit into the whole.
Breaking down the risks in an understandable way helped the team focus on the big picture and work toward mitigating the most significant risks first.
You don’t necessarily have to use Active Risk Manager (ARM) software, but keep your goals focused on the overall outcome in an easy to understand way while also giving members of your team ownership of their pieces of the plan.
Make risk management part of your culture
Risk managers hold a very important job. It’s not a role for someone who is early in their career without the experience gained over years of working in the field. Members of the M25 team knew they needed to build a culture of risk management and gave the lead roles to senior managers within each section.
All members of the M25 project team were encouraged to communicate through social media such as LinkedIn and other networking sites to keep up to date on all aspects of the project.
Making senior managers part of the risk management team and encouraging conversation sent a strong message that risk management was vital to the success of the project.
Make it clear in your company that risk management is not an afterthought or a back-burner issue. Risk management is what will make your company a success. Risk management is a value-add. Make sure you are sending that message to your whole team. As everyone comes to understand risk, they’ll all become risk managers and support and help to put procedures in place that keep your company safe.
In all the uncertainty, we know that risk management is done most effectively when risks are examined upfront and regularly reviewed, when it’s visible and part of your culture, allowing employees to take ownership and contribute. Having a plan and process in place for calculating and dealing with risks is vital for your company’s survival. The biggest risk to your success is not actively managing potential risks.