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A Real Life Risk Story…

24/09/2015 - Enterprise Risk Management Risk Culture Risk Analytics

This happened in the Protecht Neighbourhood

I have read many posts recently where questions were asked about how to define a risk, and other about how to identify a risk. While ISO 31000:2009 is a great starting point in answering these questions, I have found that the use of a story is often the best approach in helping non risk managers understand risk management. This understanding should then lead to better organisational performance.

The following story is based on an incident that occurred near the Protecht office in Sydney today.

The building on the corner has a roof top garden with large sunshades to protect patrons on sunny days. The organisation that owns this terrace has a business objective to provide a setting for patrons that is comfortable and conducive to sales of food and beverages.

They also have an objective to ensure that their neighbours are not disrupted or inconvenienced and they have an objective to limit activities that could lead to a loss of licence to operate the terrace.

A real life Risk History

Today was a reasonably sunny day – but also very windy. The umbrellas were open in anticipation of a good lunchtime crowd. The wind picked up and lifted an umbrella Mary Poppins-like into the air, coming down on a tree overhanging a busy street. The picture tells the rest of the story!

So how can this be told as a ‘risk story’?

The risk story here can be told as follows: “The risk of a terrace umbrella being thrown from the roof terrace, caused by strong wind and resulting in inconvenience to neighbours, reputational damage and potential financial penalties, can be controlled by anchoring the umbrellas to the ground.”

This risk story highlights the risk event, its cause(s) and consequences linked to the organisation’s objectives.

The beauty of telling the risk story in this manner is that you avoid confusing failed controls as a risk, you are able to clearly see what your key controls are and hence develop leading key risk indicators, and can articulate what your key risk events are that impact your organisation objectives.

How are you telling your risk story?

Contact Protecht if you need assistance in developing your risk stories and embedding their monitoring and management in a system configured to your specific requirements.

 

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