Visions of Risk

How do you see risk?

One of the most difficult issues for many risk managers is the fact that people do not all see risk the same way.  No matter how hard they try, they cannot get some people to take risk management seriously.  On the other hand some people are eager to eliminate all risk.  Why cannot people just see risk the way that Enterprise Risk Managers have learned to see it?

1.  Do you see risk as something that could lead to severe problems, but if treated properly using well developed risk management techniques, then it can be controlled?

2.  Do you see risk as something that we have almost too much of – if we take any more risk then we will suffer dire consequences?  We need to work to lessen the risk that we are taking at all costs.

3.  Do you think that risk comes and goes, but in the end it all works out?  That periods of risk and loss are always followed by periods of low risk and large gains, so that over the cycle, it all works out.

4.  Or do you think that risk is unpredictable, that it is almost impossible to tell whether risks will turn into losses, so it is best not to bother with risk management?

Those are four views of risk that you probably have seen in your life and work.  As a risk manager, you need to figure out how to work with all four views, because there is little likelihood that you will convert everyone over to your view of risk.

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Explore posts in the same categories: Cultural Theory of Risk, Enterprise Risk Management, ERM, People Risk, Risk

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