Although there is a well-established “standalone” discipline of risk management, I strongly advocate that risks are best identified and understood in the context of the decisions that “create” them.
Every risk that will ever be faced (in a business strategy, product design, process flow or project/life plan) is really just a potential problem (failure mode) associated with an alternative in a decision. When evaluating alternatives, identifying specific risks for each alternative can help you select a winner or more importantly reject a disaster-in-waiting. Being very specific when identifying such risks also makes it much easier to generate specific and effective risk mitigation actions (preventive, contingent, monitoring). If you lump many potential failure modes into broad risk categories (e.g. technical risk, business risk, cost risk) then you’ve made it more difficult to define highly-targeted risk reduction investments or steps.
If you reject an alternative, the risks that you identified for it are no longer relevant; they’ve done their duty in helping you make a good decision. However, the risks that you identified for the alternative(s) that you commit to implement are 100% relevant at the instant you make your decision. At the point of decision, all these risks are assumed; they are implied by the definition of the committed alternative. In a sense, the risks are “created” at this point; they become real and relevant to you. The point of decision is therefore the earliest and most effective time to begin tracking and attacking these risks; you have maximum opportunity and leverage at this point. If you wait until your “batch” risk management process triggers a risk assessment, you lose one day of leverage against the risk for every day you wait.
Continuous risk management is easy if you manage your business strategy, product development or life as a Decision Breakdown Structure (DBS). The decisions (fundamental questions that demand an answer/solution) provide the thinking nodes where value is created. Risks (threats to value) fit nicely as “grandchildren” of the decision; children of child alternatives. All you need to start doing Decision Driven® Risk Management is a proven and comprehensive decision pattern for your business, project or life. These patterns are available today within the Decision Driven® Solutions Framework (DDSF)..
Identify and capture your risks at the point they are birthed (in the context of a decision alternative). Proven decision patterns are available within the Decision Driven® Solutions Framework (DDSF) to help. Please contact the Decision Driven® Solutions team at firstname.lastname@example.org or email@example.com to start your free trial of DDSF.