Risk Management is a process of thinking systematically and proactively about all the possible risks.
What can go wrong? How can we prevent it? What resources should be in place if it happens?
We know it is impossible that we can anticipate the future; therefore we put our efforts in decreasing the impact of the threats beyond control.
It is a common excuse heard especially from business owners: “We have no problem, it’s been working fine for so many years now!” Or from larger companies: “Those systems have been in place for many decades now, we have no problem!”.
We just think it is wrong to use hindsight as foresight. Neither we adapt old remedies to tackle new challenges. We apply detective-style investigation: what, where, why, when, who, by digging deep for an exhaustive analysis of systems, procedures, attitudes, and every aspect of the company, in order to address potential threats and hazards.
Organizations now employ highly-qualified mathematicians to quantify risk for them. So why did they not foresee the credit crunch?
Maybe a lot of mathematics is no substitute for a little bit of common sense and an open mind. And some – make that a lot – experience.
When there is a question about insurance, like the price of premium or the level of coverage, there’s always someone who knows the answers. They ’ll tell you about their policy or the policy of a friend of theirs. They can be helpful, but they ’re often useless, or worse. What works for one company rarely works for another, so it’s difficult to answer questions about insurance with anecdotes about other policies.
Business is not just a case of making profit but also of avoiding losses. Acts of commission may be different from acts of omission, but they may have the same economic impact. Emphasis is not just on earning profits but also on avoiding losses. Besides, a company can also be successful by preventing losses while its rivals go under.
Risk Management is an exciting field to work in. Working for a new client is like living a new life. We feel the responsibility of protecting what they have spent their life building to the extent that we become part of their organization – of their lives. They entrust the future of the enterprise to us. How can we let them down?
Risk Management is for people who are passionate about taking the calling.