What is a Risk Management Plan?

August 11, 2021

The benefits, the process, and where to begin.

Regardless of their age, industry, size, or structure, all businesses experience risk. Whether the threats are due to unforeseen circumstances, scheduling issues, cost overrun, or a variety of other unexpected changes, companies cannot change their occurrence, but they can change the way they are managed. Too many businesses suffer the negative fallout of threats, both external and internal. Knowledge of how to assess and respond to the risks you may face is vital for the well-being of any organisation.

Here is where a risk management plan becomes a lifeline!

What is Risk Management?

The risk management process seeks to identify, manage, and plan for any specific issues a business could experience. Pre-emptive assessment and management of threats allow an organisation to have strategic management plans in place, ensuring that identified risks can be effectively handled and mitigated.

A risk management plan is a document that lays out the processes to handle each potential threat to a business. Clearly defined management plans and specific actions to manage and remove risks are invaluable to a team. They offer peace of mind that an organisation is protected. In many ways, a risk management plan acts as a company safety net.

Sometimes the difference between success and failure simply boils down to whether a potential threat to a project is identified with enough time to prepare!

What Risks Can be Identified?

Effective risk management seeks to identify and assess anything that may present problems for a business in the future. Such dangers include but are not limited to:

Potential accidents
Natural disasters
Pandemics
Global crisis
Strategic management errors
Accidents

These could all lead to legal liabilities, financial loss, and potentially harm personnel safety or the overall wellbeing of a business. They, therefore, require planning and preparation for optimal risk management.

What is the Risk Management Process?

Risk management can be condensed into four straightforward steps:

1.Identification

The process begins by simply asking ‘what if?’. Evaluating each aspect of your business and considering how the current measures will respond to threats is the first step to finding peace of mind. In this stage, you should consider internal and external risks. What are the dangers your team may face? What are the gaps in your current systems that may cause future trouble?

2.Assessment

With the ongoing threats clearly defined, the next step is to assess the likelihood of facing this risk and the strength of your current management plans. You should assess the likelihood of an event occurring, as well as estimating the potential negative outcome. This step provides invaluable clarity as to what current risk control measures may need to be reconfigured.

3.Planning

Taking the time to effectively manage and plan responses to threats takes patience but is vital. Creating risk management plans needs three easy questions to be asked: How can we avoid this risk? How can we minimise this risk? How can we prepare for this risk? It may be time-consuming, but a detailed understanding of what measures need to be taken is the backbone of any good management plan.

4.Monitoring

Strong risk management is an ongoing process! It requires continual assessment, routine checks, and regular monitoring of the plans and steps to ensure your organisation is in the best position possible to handle whatever arises.

The First Step

You never know when unforeseen circumstances may arise – it’s always best to be safe and prepared! The best time to start the risk assessment process is now. If your team, organisation or project has not yet completed risk assessment, our team can assist.

Here at Resilient Services, our experienced team of risk analysts and emergency managers are ready to help your organisation prevent and address risks before they can pose a threat.

Enquire for a risk management plan today! You won’t regret it.