What is Risk?

Summary

This video script delves into the nuances of risk identification, emphasizing the importance of distinguishing between risks, causes, and effects. It uses the example of Charlie's objective to arrive at work on time to illustrate how indirect causes like heavy rain can lead to direct risks such as an accident, which in turn affects the objective. The script encourages filtering out objectives mistaken as risks and focusing on their causes, while advocating for frequent and collaborative risk assessments to improve identification accuracy.

Takeaways

• 📌 Risks are effects of uncertainty on objectives, and understanding this is crucial for risk management.
• ❓ The distinction between risks, causes, and effects can lead to confusion during risk sessions, and it's important to clarify these terms.
• 🎯 Objectives must be defined to identify risks effectively, as risks impact these objectives.
• 🚗 Using Charlie's example, risks are the undesirable events that could prevent achieving an objective, like arriving late to work due to an accident caused by heavy rain.
• 🌧️ Heavy rain is not a risk in itself but a cause that leads to decreased visibility, which in turn can cause an accident.
• 🔍 Identifying the direct cause of the objective not being met is key to pinpointing the actual risk.
• 🚦 Traffic congestion is an example of a risk that directly affects the objective of arriving at work on time.
• 💡 During risk brainstorming, it's common to confuse objectives with risks; the actual risks are the causes of these objectives not being met.
• 🔑 Filtering out objectives and focusing on their causes can help in accurately identifying risks.
• 🤔 Asking if the risk has a direct negative effect on the objective is a good way to determine if an event is a risk.
• 📈 Analyzing follow-up events that lead to the objective being affected can help in identifying the risk with a direct effect.
• 👥 Encouraging participation in risk assessments helps improve the identification of risks, causes, and effects over time.
• 🛠️ RISKID is mentioned as a collaborative risk management tool that can facilitate the process of identifying and managing risks.

Q & A

What is the primary focus of the video regarding risk management?

The video focuses on the distinction between risks, causes, and effects, and how to identify and manage risks effectively in relation to objectives.

Why is it important to define objectives before identifying risks?

Defining objectives is crucial because risks are identified in relation to their potential impact on these objectives. Without clear objectives, it's challenging to assess the relevance and significance of identified risks.

What is an example of an objective and how does it relate to risks?

Charlie's objective of arriving at work on time is used as an example. Risks are the undesirable events that could prevent him from achieving this objective, such as an accident caused by heavy rain.

Why is heavy rain not directly considered a risk in the context of Charlie's objective?

Heavy rain is not directly a risk because it is an indirect cause; it leads to decreased road visibility, which in turn can cause an accident, affecting Charlie's objective of being on time for work.

How does the video script illustrate the concept of a risk cause and effect?

The script uses the example of heavy rain leading to an accident, which then causes Charlie to be late for work. The accident is the direct risk affecting the objective, while the heavy rain is an indirect cause.

What common mistakes are made during risk brainstorming sessions according to the script?

A common mistake is mistaking objectives or goals, such as going over budget or project delays, for risks. These are actually the impacts or objectives that risks can affect.

How should one respond when objectives or goals are mistakenly identified as risks during a brainstorming session?

The response should involve extracting the actual causes of these objectives or goals as the real risks, such as identifying traffic congestion as the risk for being late to work.

What is the importance of distinguishing between direct and indirect causes in risk management?

Distinguishing between direct and indirect causes helps in accurately identifying the risks that have a significant impact on objectives, allowing for more effective risk mitigation strategies.

What advice does the video give for improving the accuracy of risk identification in assessments?

The video suggests filtering out risks that are actually objectives, identifying the direct negative effects on objectives, and analyzing follow-up events that lead to the objective being affected.

What is the role of the collaborative risk management tool RISKID mentioned in the video?

RISKID is presented as a tool to facilitate more engaging and effective risk assessment processes, encouraging participation and improving the identification of risks, causes, and effects.

Why is participant involvement in risk assessments emphasized in the video?

Participant involvement is emphasized because the more people are engaged in the process, the better they become at identifying risks, causes, and effects, leading to more comprehensive and accurate risk management.