Page 16 - RMAI July-September 2018

July - September 2018

program or a project. For instance, funding a new quantitative process as portrayed in text books on the
venture whose contours are not that well defined subject. It is Operational Culture that drives the
may be in for a crash or it may make enormous profits. approach to risk. Risk is actually qualitative and
There are many treatments of risk in literature, but intuitive and brings out the most creative juices of
the most tend to overdo the quantitative tools and work process. It is risk that generates the passion of
understate the softer, more people-oriented issues in business accomplishment; to overcome a
risk management. competitive challenge and create opportunity.
Overcoming risk equals business success. No
First, risk has been narrowly treated in the context of
industrial or commercial venture has ever succeeded
work-relatedactivities and tasks, but the sources of unless risks were met squarely and tackled
risk are more appropriately addressed at the business
appropriately.
and industry level. The prevailing notion about work-
related risk management has been the assumption The Software Engineering Institute defines risk
that knowledge of internal work-oriented planning management as “A successful risk management
and control issues was most important in forecasting practice is one in which risks are continuously
and managing risks and costs. identified and analyzed for relative importance”. Risks
are mitigated, tracked, and controlled to use
This assumption has driven the subject of job risk
management in directions that focus on internal effectively program resources. Problems which are
both internal to the organization and external are
work-related tasks. But business analysis increasingly
prevented before they occur and personnel
find that external business issues often have a much
more impact on the future of their organizations --- consciously focus on what could affect product
quality and schedules of production and distribution.
and project success --- than any internal issues. Thus
the roots of work-related risks lie in the forces acting There are five principles underlying the definition of
on the organization. risk:
Second, and as a consequence of the first point, risk 01. Risk is any uncertainty in a project or work-
cannot be separated from business planning, job schedule that can distort, potentially control, or at
selection, planning and control. It is integral to these least track. This means there are many risks in any
processes. Risk is the core plan challenging at the business.
heart of business development and later, work 02. Risk is integral to the business and the project
management.
planning process; therefore don't think of risk as
The separation of risk management process from the something different or separate from management.
rest of the border business and work management Risk is why you do business and plan projects – if there
paradigm is a wrong approach to the subject because was no risk, there won't be any business.
it implies that somehow risk is largely internal to a
03. Focus only on high risk, resource-consuming tasks
work schedule and therefore controlled by the work
team. because you can't focus on all of them. Assessing risk
is a question of rank-ordering risks and keeping your
Since work risk is business risk, the whole business eye on them.
strategic planning, marketing, and risk analysis
04. Monitoring risk is a question of identifying key
applied to a business framework produces SWOT
(strengths, weaknesses, opportunities and threats) milestones or points in the work schedule where risk
analysis and other outputs that support identification decisions need to be made. These milestones would
of work-related risks. These risks include mark whether a piece of equipment worked, or a key
competition, business finance, workforce issues and source was available
changes in the customer base. 05. Planning a response to risk involves
Third, risk management is largely a leadership and understanding the work andimpacts of various
management challenge first, not fundamentally a corrective actions midstream.

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