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Five Steps to Reduce Risk

by Randall Craig on January 13, 2017

Filed in: Blog, Make It Happen Tipsheet, Risk

Tagged as: ,

Are you keen on risk?  Do you seek it out?  Most people and organizations don’t – and for good reason.  Yet risk is not necessarily bad: it is part of the risk-return equation; it identifies potential opportunity… and exposure.

What is bad is unnecessary risk.  This simple framework can help:

Step One: Identify all of the potential risks. (Including the risk of non-action). This is a brainstorm that should consider all of the potential problems that might occur.

Step Two: Mitigation strategies. What can be done to reduce the chance that each risk might occur? What changes to process or methodology? To the people involved? To the technology? To the terms and conditions?

Step Three: Monitoring. Often it is easier to reduce or remove a risk if it is identified earlier in a process than later. Define – up front – how the initiative will be monitored, and who will be monitoring, and how it will be reported.

Step Four: Disaster planning. For each of the identified potential risks, how will each be handled if they were to come to pass? A useful question to ask, for each risk, is “what is the worst that can happen?” Having contingency plans in place helps the business survive with minimum disruption. As should be obvious, when disaster happens, most people are in “panic mode”, so having done the thinking beforehand is invaluable.

Step Five: Insurance. Many risks can be insured against – often at a surprisingly low cost.

These five steps make a lot of sense, but when considering risks – most people and businesses – go in the opposite order, starting with insurance, then disaster planning, and maybe, just maybe, monitoring. Most don’t consider mitigation strategies, and ignore step one, identification, completely. Doing it the right way means that you’re planning for less ominous disasters, and less costly insurance.

This week’s action plan:  Risk is everywhere – from operational, to financial, to legal, and so on.  Because digital is usually newer for most organizations, this week, focus there.  (More on digital risk management here:  Insight: 34 Social Media RisksViewpoint: Risky Businessand Identifying and reducing Facebook risks.)

Note: The Make It Happen Tipsheet is also available by email. Go to www.RandallCraig.com to register.

Randall Craig

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About 

Randall has been advising on Web and Social Strategy since 1994 when he put the Toronto Star online, the Globe and Mail’s GlobeInvestor/Globefund, several financial institutions, and about 100+ other major organizations. He is the author of seven books, including the recently released “Everything Guide to Starting an Online Business”, and speaks across North America on Social Media and Web Strategy. More at randallcraig.com and 108ideaspace.com.

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