Risk Assessment: What Future are You Planning for?
There exists an overabundance of guidance for conducting risk assessments. Yet, it seems that we still have difficulty in getting risk assessments to reflect the appropriate level of concern for the identified risks that we are assessing. We also tend to view risk in relation to the place where we are employed and the industry that we work in. When we look at risk assessment from this perspective it should be clear that we are missing the point precisely, or at best, are being too narrowly focused, when it comes to assessing risk for our organizations. This is not to say that our efforts are wasted. The risk assessment process is valuable regardless of how limited or narrowly focused it is. So, the question we should be asking ourselves as we prepare to implement a risk assessment is: “What future are we planning for?”
Risk Dimensions When thinking of risk, it is perhaps helpful to structure risk into spheres and then sub-categories that take the assessment to more definitive analysis. Since risk is multi-dimensional we need to take a holistic view of our analysis process. In this respect one can simplify the dimensions by breaking risk into three categories: Strategic, Operational and Tactical. As depicted in figure 1, entitled, “Risk Dimensions”, these categories can then be further organized based on likelihood of realization, impact and depth of penetration, touchpoints affected, nonlinearity, opacity, reactivity and velocity (not necessarily all inclusive).
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