Risk Management Process
When creating a risk management plan, it is easiest to take the five step approach. These five steps are:
- Understand your risk context
- Assess what could go wrong
- Decide what to do and communicate your plans
- Implement your plans
- Follow up and adjust
This refers to the “state of mind” of the administration of the institution or department. It could be a youthful optimism bias, or perhaps the department is decentralized. Perhaps your department is at a high risk because it deals with the public, do your classroom topics involve heated debate? Departments and organizations must approach risk management in ways which are specific to them.
Assess What Could Go Wrong
Within this section there are two main divisions of risk. These are frequency and severity.
A frequent risk is one which occurs often, these include slips and falls, medical emergencies as well as car accidents. A severe risk is one which could cause great financial loss or reputation damage to an organization. Severe risks could include sexual assault, class action lawsuits for discrimination, as well as death.
Decide What to Do and Communicate your Plans
Keep the list of risks to a manageable number. This enables the department to identify and work on a plan. Having too many risks to deal with will leave your department feeling overburdened and the task insurmountable. It is important to get feedback on this level because there may be issues which a manager would not be aware of. Consult with colleagues and other institutions to get input on problems at this stage, they may be aware of existing issues or problems which could arise. Also consult with Risk and Insurance Services, and most importantly discuss the plan with the people who it will most directly affect.
Implement Your Plans
Will new policies, procedures, reports need to be created? Will it be necessary to create a committee to implement the plan?
Follow Up and Adjust
Do an analysis of how the plan is working or how it is failing. Are there any specific areas of the plan which could be altered to better fit the risk? What needs to be changed? Make the necessary improvements and at a later time re-evaluate how the plan is working.