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What's Risk Administration?
What's Risk Administration?
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Joined: 2022-09-26
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Without referring to the millions of websites and documents knocking about that talk about Risk Administration, I want to try and give a easy view from the angle of somebody who has to manage risk daily across main projects. This is real risk administration, fingers on.





After all, "Risk" and "Risk Management" will have variations of the same general that means depending on the circumstances or context to which it is applied, however in precept, all risk administration will observe more or less the identical process.





So, what is a Risk? A risk may be any affect on an anticipated or planned consequence that changes that outcome. In child-talk, it's anything that could stop you getting what you want or expect.





This is an essential note: Risk hasn't happened yet. If the outcome has already modified on account of a risk "occurring" then it's no longer a Risk, it's an Challenge and has to be managed differently.





So basically - A risk is something, anything, that could occur that will impact or change a desired or planned outcome. There are so many totally different ways to state this that, as simple as the concept is, it can easily get confusing. Let me offer you an instance;





"If it rains at this time then the sphere trip must be cancelled" - the risk is that it might rain. The impact is that the planned journey will have to be cancelled. Risk Administration is recognizing the risk potential analyzing the probability and impact and either mitigating it or preparing different options that will allow the original plan to succeed.





Risk Management one zero one





On some of my projects in Asia I've had to noticeably consider the impact of rain on project outcomes. I used to be on one job in Korea, Seoul, where we had a limited time to move a banks' trading office from an old building that had been sold off, to a new building. The old building owner declared bankruptcy and sold off the office block. The new owner, the government, kicked everyone out on quick notice. We had 3 months to find a new building, fit it out and move 200 workers together with 120 trading positions.





This really tested my teams Risk Administration ability. This was a working business, the only window to move the 200 workers was over a weekend - after trading stopped on Friday night and earlier than it started on Monday Morning. Guess what, we had a Hurricane heading in, and for those that don't know how things work in Asia - Typhoons are given warning signals as they approach by the native authorities.





Each signal signifies a level of "risk" and or probability of a direct strike. Because the signal rises in energy the menace (and danger to life and property) turns into imminent and public providers shut down. Persons are told to go residence or keep off the streets and, for a number of hours to a number of days, everything grinds to a halt.





I had a irritating time managing risk by the hour. The choice to roll back the move to the old office or proceed and hope we received everything in before the hurricane hit was a 15 minute overview, each quarter-hour for the primary half of the weekend. That was Risk Administration like I by no means had to manage before. Risk Administration is critically essential to project work.





What's Risk Administration?





So, the which means of "What is a Risk" should, I hope, be graphically clear now..? Risk Management is the process of managing risk as it relates to particular circumstances. The methods, instruments and processes used to manage risk are quite pragmatic and customary-sense. However all of us know that there's no such thing as "Common Sense" so the very best way to get a consistent framework around managing risk is to be taught some greatest practices based mostly on business proven templates and methodologies.





I am not here to push one methodology or best observe against another. I have my personal preferences primarily based on my industry and expertise but I know and have seen many other project managers use various methods and instruments in Risk Management, all legitimate and most of them effective at doing the job.





In a follow up article I will talk more specifically about Project Risk Management. I'll share some templates and examples and hopefully stir up some discussions too. There's no one proper way to do Risk Administration however there's a consistent framework that should be followed and there are some excellent business standards in Risk Management space.





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