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Risk Doctor Briefing: Seven Questions to Shape the Risk Process

SERIES ARTICLE

Dr David Hillson PMI Fellow, HonFAPM, FIRM

The Risk Doctor Partnership

United Kingdom
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Anyone facing a risky and important decision or project will need to answer seven basic questions. In fact we could shape the risk management process around asking and answering them. If we do then the risk process will become intuitive and natural, easy to follow, and less bureaucratic or forced. The seven basic questions are as follows, together with the related step in the risk process:

  1. What are we trying to achieve? (Establish Context) We cannot start any risky venture without first clearly defining its scope and clarifying the objectives that are at risk. We also need to know how much risk key stakeholders are prepared to accept, since this gives us the target threshold for risk exposure. We must address these factors as the first step of the risk process.
  1. What could affect us achieving this? (Identify Risks) Once objectives and risk thresholds are agreed, we can start identifying risks, which are uncertainties that could affect achievement of objectives (including both threats and opportunities). There are a variety of risk identification techniques, each of which has strengths and weaknesses, so we should use more than one approach. In addition to considering individual risks, we should also address overall risk exposure.
  1. Which of those things are most important? (Assess Risks) Not all risks are equally important, so we need to filter and prioritise them, to find the worst threats and the best opportunities. This will help us decide how to respond. When prioritising risks, we could use various characteristics, such as how likely they are to happen, what they might do to our objectives, how easily we can influence them, when they might happen, etc. We should also consider the effect of overall risk exposure on the final outcome.

What shall we do about them? (Plan Risk Responses) Now we can start to think about what actions are appropriate to deal with individual risks, as well as considering how to tackle overall risk exposure… 

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About the Author

Dr. David HillsonDr. David Hillsonflag-uk

The Risk Doctor 

Dr David Hillson CMgr FRSA FIRM FCMI HonFAPM PMI-Fellow is The Risk Doctor (www.risk-doctor.com).  As an international risk consultant, David is recognised as a leading thinker and expert practitioner in risk management. He consults, writes and speaks widely on the topic and he has made several innovative contributions to the field. David’s motto is “Understand profoundly so you can explain simply”, ensuring that his work represents both sound thinking and practical application.

David Hillson has over 25 years’ experience in risk consulting and he has worked in more than 40 countries, providing support to clients in every major industry sector, including construction, mining, telecommunications, pharmaceutical, financial services, transport, fast-moving consumer goods, energy, IT, defence and government. David’s input includes strategic direction to organisations facing major risk challenges, as well as tactical advice on achieving value and competitive advantage from effectively managing risk.

David’s contributions to the risk discipline over many years have been recognised by a range of awards, including “Risk Personality of the Year” in 2010-11. He received both the PMI Fellow award and the PMI Distinguished Contribution Award from the Project Management Institute (PMI®) for his work in developing risk management. He is also an Honorary Fellow of the UK Association for Project Management (APM), where he has actively led risk developments for nearly 20 years. David Hillson is an active Fellow of the Institute of Risk Management (IRM), and he was elected a Fellow of the Royal Society of Arts (RSA) to contribute to its Risk Commission. He is also a Chartered Fellow of the Chartered Management Institute (CMI) and a Member of the Institute of Directors (IOD).

Dr Hillson can be contacted at [email protected].

To see other works previously published in the PM World Journal by Dr David Hillson, visit his author showcase at http://pmworldlibrary.net/authors/dr-david-hillson/