Important Steps in Managing Enterprise Risks

Risk management is a complicated domain but there are some general suggestions which will help risk managers working in any industry: 

Measure risks and impacts 

After choosing the measurement method, it is possible to make a calculation that numerically considers the probability of an event happening and its potential impact. With that, it is possible to start planning responses to those events that are, at the same time, very likely and have great repercussions, and then plan how to respond to those that are only very likely. Then, you can then focus on those that have only one big impact, and so on. 

It is also possible to assign a unique number to each risk, using the formula Risk = Probability x Impact. This way, you will have an accurate order of the possible events in your table and be ready to start planning your responses. 

Another important analysis that can be done is the General Project Risk. The value is arrived at by summing up all the risk values ​​of the projects and dividing by the number of risks. This is an extremely important data to assess whether the project will be worthwhile over time. 

Note that this numerical approach makes all procedures incredibly rational, but at the same time, it makes everything more complex and time consuming as well. Soon we will show you how to get all this data together much faster and more reliably. 

Monitor results frequently 

The risks to a project are not immutable. If you did all these calculations at the beginning of the year and, two or three months later, the economic conditions of the country or your company change for better or worse, some threats will become more and others less likely. In addition, any change also affects the prediction of each one's impact. 

In addition, from the moment you apply your mitigation plan, the isolated numbers for each risk decrease and, consequently, the overall number as well. 

For this reason, it is highly recommended that you monitor the results you have found throughout the project. Only then will you be sure that a random move will not change some very significant details of your spreadsheet. 

Attention to culture change 

We have reached a point that deserves to be highlighted: the change of internal culture to reach the great objective of reducing corporate risks. This is because the effectiveness of the mitigation plan is directly linked to the success of the project. It seems like obvious information, but it is not impossible for one thing to conflict with the other. 

The mitigation plan is a step in a risk management plan and this, in turn, has the function of gathering data that generate confidence during decision making. 

Thus, putting the ego of managers or the vanity of employees ahead of the company's greatest interests can make everyone forget that the goals and objectives of their sector only exist to facilitate broader goals and objectives. If teamwork is the focus, not only does the entire project structure become easier, but also the risk of internal malfunctions decreases. 

So, remember: a manager and employee of a risk management plan must not become a risk to the execution of your project themselves. 

Don't get too attached to details 

Don't make the mistake of trying to be too analytical or too detailed if your time doesn't allow it. Of course, the less time you must organize each stage of the plan, the more exposed you are to risks. But wanting to examine every tiny issue closely can make your plan unviable, so it doesn't get off the ground within the stipulated time. In addition, being too bold and limiting your risks too much does not allow you to take advantage of some good business opportunities. 

Have a plan B 

Always consider that something can go wrong, or that more than one problem can arise at the same time. This is a scenario that seems pessimistic, but it should not be overlooked. It is better to have a plan B than to be stuck with something that prevents you from moving forward. 

Therefore, plan an emergency response (quick and even radical decisions) for cases like these. It may be necessary to abandon stages of a project - or, at worst, the entire project -, relocate employees, cut expenses, etc. 

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