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Risk, you and your business – making sense of it all

Risk comes from not knowing what you’re doing – Warren Buffett

Risk management – that’s what ‘they’ use to stop us enjoying ourselves, surely? You’d be forgiven for thinking that, given the way many ‘experts’ focus on risk as wholly negative.

At IIRSM, we take a different view. Business has always involved risk – it’s fundamental in all aspects of decision making. For instance, in buying a car, where we instinctively balance cost, performance, safety, economy, environmental concerns and capacity, we are dealing with risk. 100% safety simply doesn’t exist, nor does ideal performance coupled with ideal economy. Life has always involved informed risk taking.

8 out of 10 businesses fail within the first 18 months – Bloomberg

IIRSM is first and foremost a community of individuals. We are united around a common desire to use risk management techniques to make better decisions in business, both in operations but also strategically too.

None of this is rocket science. It is however about skilfully using the right tools and techniques at the right time. It’s also about people – capturing hearts and minds, avoiding jargon and better understanding how and why we make decisions, the cognitive biases involved and how we can influence them.

If you don’t risk anything, you risk even more – Erica Jong

Traditional risk management is about managing a list of so-called risks – bad things that might happen. But risk management is really about increasing the likelihood of achieving your objectives. It’s not just about avoiding harm.

It’s about informed decision making, from developing strategy, making projects happen, and also the many day to day decisions made across your business. It’s neither something new nor complicated, nor is it separate from running your business. Risk management helps you ask the right questions, assess the answers and make better decisions.

Risk management is about effective management – and IIRSM members play a vital role in keeping our organisations working.