9.4.3 Where Risk Management should be used

A risk management plan should cover the whole business.
It does not have to be complicated and time consuming to be efficient.

 It can be prepared by following the steps described below:

  1. Prepare a list of potential risks. All managers should take part and everyone outlines at least 10 potential risks.
  2. Summarize the total list.
  3. Study their probability and effects; classify them in groups (high, medium and small risk).
  4. Determine 'warning signs' which would alert you to risk occurring.
  5. Determine possible preventive actions for each threat.
  6. Classify potential risks and prepare an operation plan for the bigger ones. Find out and include in each plan the possible actions which would prevent or reduce the consequences of the threat.
  7. Identify the people who will be in charge of watching for 'warning signs' of each risk and responding adequately to this threat.
  8. Inspect the whole plan, add or change items, if necessary.