Your Step-By-Step Guide to a Successful Risk Assessment

risk-assessment

The modern business landscape is fraught with risks.

Some of them originate from physical and natural surroundings, while others lurk in the cyber world. They can hamper your ability to achieve goals, compete in the market, and operate profitably.

The good news is you can rely on one tried and true method.

Namely, risk assessment is an integral part of health and safety management. Its primary aim is to weed the risks out and study their impact. In the process, it also produces various practical measures and controls.  

There is a lot of ground to cover here, but do not fret. Here is a comprehensive guide to anticipating and minimizing the adverse effects.

Risk Assessment in a Nutshell

Risk assessment is the practice of recognizing and treating vulnerabilities.  

They come in all shapes and sizes and the chief goal is to reduce them to a manageable level.

Right off the bat, you should notice each company is unique. This is to say no two risk assessments are the same. It also suggests that instead of hard rules, you need to follow some general principles.

They inform your efforts and help you put a risk management framework in place.

The process itself contains five steps:

  • Identifying the hazards
  • Determining how they affect your business
  • Gauging the risks and working out measures
  • Documenting the findings
  • Reevaluating and updating the assessment

These steps are interconnected, but it makes a lot of sense to separate them. This is a great way to break down the work ahead into smaller bits.

Hazard Detection

The first thing to do is to collect information and pinpoint potential hazards.

This category differs from risks. It entails concrete sources of harm and danger, not the likelihood of them occurring. Hazards can be anything from toxic spills and workplace violence to data breaches.

There are multiple ways to go about picking them out.

Most companies perform operation-wide inspections and gather employee feedback. Employee feedback could act as the balancing factors in best going about these assessments. Both tactics yield results and both executives and workers should take part in them.

In fact, you want to take into account any relevant information assets you possess. While at it, communicate methodology openly and provide training if needed. Balance these priorities with information confidentiality and integrity.

Discover Who is Affected and How

The next stage requires you to establish who might be harmed and in what way.

Take a step back and go through past incident reports. See what segments of the workforce are the most vulnerable.

People handling strenuous physical tasks tend to be under the greatest injury risk. On the other hand, executives may be more exposed to risks in the cyber realm.

Once you put together your risk profile, conceive how the harm is likely to manifest. Does it affect your finances, team morale, reputation, or something else? What is its impact on the individuals and the organization as the whole?

Answering these questions lets you predict what would happen in worst case scenarios.

Develop a System of Controls

The following phase revolves around measures for protecting your business.

First off, engage in strategic planning. Understand how available assets can drive desired assessment outcomes. Align them with governance structure, as well as tools and techniques defined in your plan.

Moving on, you need to decide who holds the responsibility to tackle risks. These individuals are called risk owners or monitors. Often, they are also asset owners in a high enough position to act with authority.

Procurement and implementation of new processes and controls is their crucial task. To aid them, procure a list of all the activities they will have to complete.

Document the Risks

It is a good idea to put all your findings and controls in black and white.

Documentation serves as a nice reference point that guides your decision-making. Today, it is also a legal requirement for many companies.

So, record consequence scenarios and create a risk library. Express the likelihood of risks in numerical values. This number determines the order of priority of risks on the list.

Another thing you want to do is calculate the trade-off between the risk and returns. This equation determines what the prescription is: risk mitigation, transfer, avoidance, or acceptance.

Ongoing Fine-Tuning

The last step is the longest or to be more precise, ongoing.

Workspace conditions change over time. Threats get ever more sophisticated, epically on the cyber frontier. The regulative climate is becoming tighter and tighter.

Your risk assessment must keep up with these developments. Getting complacent is not an option.

Instead, set up a process of continuous monitoring. Conduct periodic reviews of your library and see refine your measures and techniques.

Scope out what your competition is doing to keep the risk at bay. Optimize your plan based on new insights.

Tackle emerging risks before they spiral out of control.

On the Safe Side

In this day and age, a thorough risk assessment is integral to business success. The last thing anyone would want is to be involved in a risky situation, where everyone is facing harm. Taking preventative action will lessen the impact should anything happen. You’re going to want to hope for the best and prepare for the worst!

The best way to execute it is to embrace a proactive, holistic approach. Grasp the big picture by factoring in your unique business requirements and assets.

Come up with a solid plan and bring everyone up to speed. Define roles, processes, and responsibilities. Allocate resources where they make the most difference.

Follow the five-step plan and switch between different stages of assessment as new information surfaces. Never stop learning and improving your risk management. Contact us if you need help with planning and implementation.