I think we all forget that we, as humans, are natural risk managers. We do it so innately that we don’t even think about it. Every day we process a huge numbers of risks, determine the appropriate controls, implement those controls and then determine if the controls work. Said another way, we perform the basic risk management process hundreds of times a day.


Let’s look at an example. As I write this blog entry I can see outside my office window. It looks cool, but not cold. I am wearing a dress shirt, pants and shoes. I am thinking about going out for lunch, but realize that it is too cold without a jacket. So, I find a jacket and put it on before I go outside. Once outside I realize the jacket is too warm done all the way up, so I unzip it to make it a little cooler.


Sounds fairly mundane, but this is a risk management process;


What is the risk – I get cold!
What is the consequence – I get sick
What is the control – The jacket
What is the monitoring process – The jacket is too warm, so I unzip it
Result – Risk is mitigated, I don’t get cold, don’t get sick and have a pleasant lunch


The fact is that all risks look like this. We overcomplicate the process in our work-lives for no reason. We are natural risk managers, each one of us. We just need to remember, that the fundamental risk management process is simple, not complicated, and if we address each step in a simple way we manage our risks better.


One parting thought on Risk Management in your daily life, before the holiday season. Did you buy your kids, wife, husband, significant other, etc. the right gift this year? Think about it… that is a key risk management process if I have ever seen one.


Happy Holidays from Active Risk.

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