Scratch the surface of the subject we call Risk Management, and you’ll quickly discover “a rapidly developing discipline (with) many and varied views and descriptions of what risk management involves, how it should be conducted and what it is for.” (1). Indeed, many Scottish businesses faced with adopting a coherent policy in this area find that wading through the varied schemes and strategies on offer can rapidly turn into a risky venture all on its own, especially if you’re the manager charged with making sense of it all.

“Everyone is looking for accurate information to manage risk: your shareholders, your customers, company executives, traders and portfolio managers. They’re all tapping information from disparate systems.” (2). So how do you draw all this information together, and assess which forecast is the correct one to act upon?

The key to managing risk comes in the way you identify it. Not just in terms of pin pointing the individual risks that your company faces, but also in the way you define the term itself. The most salient point about planning for future adversity is that although highly necessary, spending too much time and effort in this area can in reality have a negative effect on your day-to-day business. Plan ahead sure, but don’t go overboard. See risk not as a negative, but in the context of innovation. You’ll then be starting the whole process from a positive perspective. “The focus of good risk management is the identification and treatment of these risks. Its objective is to add maximum sustainable value to all the activities of the organisation.”(3)......

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Sources:
1,3,AIRMIC, ALARM, IRM - "A Risk Management Standard." - 2002.
2 www.sas.com - "Risk Dimensions® in the Financial Industry." - 2004.