| Every enterprise comes with its own risk component. | | | | By analyzing risks in different aspects, you will be |
| This is true not just in the business world, but life as | | | | able to secure your company from such elements. |
| well. In a highly complex world as today, the risks and | | | | You can also evaluate the systems, structures and |
| dangers confronting us are legion. A proper risk | | | | operations and see the possible risks involved in each |
| analysis should ideally explore all the risks that you or | | | | of these areas. You can look for any loopholes or |
| organization is most likely to face. A clear study of | | | | vulnerabilities in these areas and also seek the opinion |
| the risks involved will provide you solutions that will | | | | of an external observer, who might be able to |
| help you to decide the right steps to minimizing the | | | | provide new perspectives to the issues under |
| risk factors. Also, a thorough risk analysis will throw | | | | scanner. |
| light on whether you are adopting the most | | | | Once you have identified the different areas, you can |
| cost-effective strategies to control risks. | | | | estimate the cost component involved in mitigating |
| Risk is basically a likely loss that will result in the | | | | these risks. To arrive at the value of the risk you |
| event of a particular situation or condition happening. | | | | have to multiply the probable event to the cost |
| It is gauging the extent of possible loss. One way to | | | | involved to set it right or ensure it is risk-free. The |
| assign a numerical value to the risk situations is to | | | | next step would involve using appropriate methods |
| calculate risk in terms of probability of the event and | | | | to address the different risks. You could improvise on |
| the cost of event. | | | | the existing assets or go for new methods to |
| Risk = probability of event X cost of event | | | | counter the risks. Finally it would be useful to make |
| Such a process will help in evaluating risks objectively. | | | | periodic review to test the effectiveness of the |
| In order to make a detailed risk analysis, there are | | | | system engaged to tackle different risk elements. |
| certain processes to be observed. | | | | To make such a structured risk analysis, Mind Maps |
| First it is important to identify the nature of the risk - | | | | are a great boon. You could, to start with, use Mind |
| whether: | | | | Map to assess all the risks in as wide an area as |
| Human - individuals, organizations, death, accident, | | | | possible. They could be broken into all the different |
| illness, etc. | | | | elements as financial, human, systemic, etc., and |
| Operation - disruption to supplies, order execution, | | | | analyzed thoroughly. Because Mind Maps provide |
| distribution, etc. | | | | unhindered flow of ideas, you will be able to cover a |
| Procedural - failures of internal systems and controls, | | | | wide canvas unlike the usual conventional linear |
| accountability, fraud, etc. | | | | method of writing them down in list form. |
| Projects - cost over-runs, poor service or product | | | | Simultaneously, you could size up the existing flaws |
| supply, lack of contingency planning, etc. | | | | or inadequacies in the different operational units that |
| Finance - a sudden drop in stock market, interest | | | | expose your company to dangers or high risks. |
| rates, failure in business, break in partnership, etc., | | | | Formulating contingency plan or risk-mitigating process |
| Technical - advances in technology, technical failures, | | | | will be the next step in the process. In all these |
| etc. | | | | steps, you will find that Mind Maps pave way for |
| Natural - disasters such as earthquakes, floods, | | | | easy flow and creative outlook as they lend |
| disease, typhoons, etc. | | | | themselves to associations and quick links. By |
| Politics - regime change, change in taxes, government | | | | providing a full picture of the risks involved, you will |
| policies, war, etc. | | | | be able to address each of them differently and |
| Others | | | | efficiently. |