Risk Management: A quick and dirty guide to managing the worries in your life

I’ve recently been doing some sessions on risk management* and, as it often does, it really got me thinking about risk management in everyday life. One of the reasons I like risk management and enjoy training it, is because it is a fantastic stress-reliever.?

Good risk management is about working out all the things that might stop you achieving what you want to achieve, and then coming up with strategies for ensuring they don’t get in your way. ?Doesn’t that sound like a great way of reducing the anxiety in your life?

With that mind, this article presents a scaled down version of project risk management (but very much based on the core principles of project risk management) that you can use to manage the risks (/worries/concerns) in your life. ?I hope you find it helpful.

The approach is to manage your risks in three straightforward steps. ?It doesn’t need to be a massive exercise either. ?Spend just five minutes doing this about one aspect of your life and you will almost always feel better at the end of it. So, without further ado, step one…

STEP 1: Identify and score your risks ?

1. Write down at least three and up to ten of the things that you are worried about (in general, or in relation to a specific activity or goal) ?
2. Score each of these worries from 1 to 4 for impact and probability:1 being low impact/very unlikely to happen;4 being huge impact, very likely to happen; according to the table below and plot them on the graph.So, an impact of 3 and a probability of 4 ends up in the red zone. ?Be as honest and realistic as you can be with the scoring. Try to avoid our competing tendencies to either be overly optimistic about the probability (bad things are generally less likely to happen than we fear) or to catastrophise about the impact (if they do, the outcome is often not as bad as we’d feared). ?
3. Treat each risk as follows: Top right: Mitigate (RED) Top left, bottom right (AMBER): decide for each of them if there is something quick and low-cost that you could do to mitigate them. If so, do it. ?If not, keep on the back-burner until you have more time to address them. Bottom left (GREEN): don’t worry about for now.

STEP 2: Mitigate risks

Having identified which risks fall in the red zone (and are therefore worth your time and effort to mitigate), spend a few minutes thinking what you can do to mitigate either the probability (i.e. make the thing less likely to happen) or the impact (if it does happen, the effect is not as great).

When thinking about your mitigation, step through the following strategies:

1. AVOID: can anything be done to avoid the risk altogether (e.g. picking a different route to avoid a known traffic blackspot).
2. REDUCE: if it cannot be avoided altogether (“There is only one road that goes to my destination…”), can you do anything to reduce the risk (“…but if I set off two hours early, I’ll completely miss the rush hour.”)
3. TRANSFER: if it cannot be avoided or reduced, is there a way to transfer the risk so that another party will deal with it if it happens. Insurance is an example of transferred risk (if I do crash my car, I can’t avoid or reduce the cost of the work, but I can take out a policy so that the insurance company pays for it).? Is there someone or something else that could manage the risk for you?
4. ACCEPT: if none of the above is going to work, it’s time to accept the risk. Whilst this seems a bit of a weak response, it is in fact incredibly empowering.? By consciously accepting that there are certain things you can do nothing more about you free up your mind to concentrate on the things you can ? Great work!

STEP 3: Implement and review

The final step is to implement your mitigation strategies for your top risks.? Doing something about the things that worry you feels great – and because you’ve put a bit of science behind it you can rest safe in the knowledge that your attention is focussed on the right things and that you are not spending time trying to fix something that will ultimately make little difference to your intended goals.?

Finally, go back to your list and update it once you have implemented your mitigation.? Have some of your original worries gone away now? Do you have a new group in the red zone?? How can you mitigate these new risks?

Regularly undertaking a process like this is a great way of not just achieving your goals, but feeling in control along the way.? I hope you found this useful.? Let me know how you get on!

* …and if you would like me to come and speak to your organisation about risk management, get in touch here!

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