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The value of risks
Although we all make various risk-related decisions every day, taking risk factors into account and as an introduction to this topic we would like to start with a sport that includes a lot of risks; climbing mountains. Mountain climbing entails heroic victories about reaching the top. However, it also entails (bizarre) accidents that can even overcome the most experienced mountain climbers. This can lead to questions such as "how could this happen and what could they do about it"? "Have the risks been sufficiently recognized and what have they done to get a grip on these risks?"
Of course, there are situations and circumstances that mountain climbers cannot control, but which they can prepare for should they end up in such a situation. Consider; changing weather conditions, unknown damage to mountain walls and extreme hardships. They do not know if and when this will take place and what the impact of these potential risks could be. But they can take the right materials with them to avert a hazard as well as possible and increase their chances of survival. Other factors that can lead to an accident could be carelessness of yourself or fellow climbers, these are also risk but are more likely to fall under the category of errors that can cause you problems.
Business risks
We are currently seeing a trend that understands the increasing importance of risks. This is partly due to the attention to risks and opportunities in the new versions of ISO 9001, 14001 and 45001. Compliance with the new standards activates awareness and can be an incentive to have another look at the working methods of your organization, putting 'risk glasses 'on. Of course, there are risks at every level (strategic, tactical and operational) within an organization and every level is important! However, it all starts with a risk assessment of the strategic goals of your organization.
Making your strategy explicit
The organization must make their strategy explicit in order to create an analysis of its strategic opportunities and threats. One of the reasons that risk management is not yet bearing fruit, is the fact that risk management is often very insufficient within organizations. However, it is precisely this that should make people realize that risk management is linked to the dynamics of their business. By making your strategy explicit, you thereby prevent too much focus on the execution of the primary tasks and decrease the common view that sees risk management as a burden. Therefore, we must try to achieve a risk-driven organization in which risks are actively and intrinsically managed at all levels.
The focus in risk management should, therefore, be on identifying risks that can jeopardize your strategic objectives and subsequently about the control of measures that positively influence the chance of risk occurrence within your company and the consequences thereof. Incidentally, it is still the case that many organizations project risk management on only the negative factors, while they should be consciously looking at the development and effects of positive factors as well. So, look at opportunities and the strengths of your organization, because these include risks that we often do not include sufficiently in our risk assessments. Additionally, the risks of missed opportunities and the loss of your strengths are also important. Indeed, these can be negatively influenced by rapid changes, increasing competition and the expansion of regulations and government intervention.