Category Archives: Risk

How to Handle Risk Management.

An organization cannot exist without taking any risks. The question is, how to manage those risks to improve predictability and reduce the level of risk?

Don’t make risk management an expensive and time consuming project.

Too often risk management is seen as a time consuming exercise. I personally believe that this is unnecessary.  When we talk about strategic risk management, it is possible to have just one or two sessions of about 1.5 hours with the top management to list all the risks.

Focus on the top 10 risks

Make sure the focus is on the top 10 most important risks and don’t bother working on all the risks for the moment. It is important to assess the risks by next year, as by then you can focus on the other risks to the organization.

Align the company objectives with the risks

To accomplish this, start with the stakeholder analysis including the objectives of every stakeholder related to the company. This helps you focus on the important risks that have a direct effect on the stakeholders and the objectives.

Internal communication

It is very important that the employees support the risk management. In order to increase support it is essential to communicate the importance of the risks and that people understand why certain actions are taken.

Have a clear division of tasks

After all risks are registered it is important to assign owners to certain tasks, preferably people in higher management positions. They will then be responsible for the corrective and preventive actions taken to reduce the risk levels. The managers can give certain tasks to other employees but they are responsible for the risk.

Go further than only financial risks

Most companies have the financial risks in order due to the yearly check by an accountant. There are more than just direct financial risks for an organization. Make sure you also think about the broader picture than pure financial risks.

Use risk management as a guide for management

Risk management is much more than just listing all the risks. It is an instrument to help management get a good picture of the risks involved. Next to this, it is a great tool to perform and manage corrective and preventive actions based on these risks. Furthermore, it holds some great input for the yearly management and the actions give a good measure on how management performs.

 

This article has been written by Jantina van Rossum of iConact.

Risk assessment done, now what?

Risk analysis has become a vital exercise for a lot of international standards. A large majority of certified companies are required to have a  risk assessment methodology and should be aware of the risks within their company and operations. Some companies have been creating this analysis with a lot of passion using all the knowledge they have. However, a lot of companies just perform the analysis for the certification and simply check it yearly or twice a year during an audit or management review. So how is it possible to make sure risks are really embedded in the company culture?

Risk Treatment Plan

A good way to start is by creating a Risk Treatment Plan. The purpose of a Risk Treatment Plan is to define exactly who is going to do what. You can also call this document an ‘Implementation Plan’ or ‘Action Plan’. It is crucial to get your management approval on the plan because it will take considerable time and effort (and money) to implement all of the actions. Furthermore, management approval also gives you the mandate to ensure things happen. Make sure you have clearly defined tasks for people to perform.

Issues

Next to the Plan, a great way to make the risk assessment more dynamic is by embedding it into the issue management or CAPA. When an issue has occurred, check the risk analysis and see if there is something mentioned about this specific issue. The issue could be a minor problem or a major problem, either way it is best to check the risk assessment. When the issue has some serious impact on the company, modify the risk assessment and add the risk. This way the company is able to use the risk analysis as a dynamic document that holds valuable lessons learned of the company.

Big Changes

When big changes happen within the company, you can use the risk assessment as guidance. Yes, companies should take risks to strive for a better future. But companies should make sure they take calculated risks. By embedding these big changes within the company’s risk assessment, the top management has a feeling of what could go wrong if no precautions are taken. This way, the top management can plan and prepare for the big change and manage it much better. The role of the quality manager is to ask the right questions for management.

Working environment

A big part of the risk assessment includes risks in the workplace. Of course the most obvious ones are included such as the risks with lifting machines and the other heavy-duty machinery, but the less obvious are the ones that can cause danger. The big risk comes when a routine of the work activity kicks in. When people are doing the same job every day and completely understand how to do it, less care is taken and something can be out of place. That is when the danger starts. Make sure that the employees that perform inherited dangerous tasks always perform a quick Risk assessment before they start to prevent any problems from happening. Having people sick at home is a great risk in and of itself. Next to the physical risks, psychological risks shouldn’t be neglected. The psychological risks of the stress heavy jobs should be monitored on a regular basis also.