Every Manager Is a Risk Manager

The definition of “risk management” can mean different things to different people. But according to a recent Harvard Business Review article by Ron Ashkenas, managing partner of Schaffer Consulting and a coauthor of The GE Work-Out and The Boundaryless Organization, risk management consists of identifying, prioritizing and mitigating the impact of unforeseen events.

“In other words, it’s a form of proactive contingency planning — either to completely avoid difficult situations, or prepare for them so that any undesirable consequences are lessened,” Ashkenas wrote.

Another prominent issue surrounding risk management: Who should be responsible for this role within an organization? The answer is simple: If you are a leader, the act of managing risks falls on you. Sure, many large organization have a devoted risk manager for more high-profile risks, such as cybersecurity and facility security, but the process of risk management extends to less visible risks that receive less attention.

Ashkenas details these less obvious risks that shouldn’t evade a business’ risk management program.

  • Project Risk: “As a project leader you need to continually think through the risks that might endanger a project, focusing on how to get around them or limit their impact.”
  • Reputational Risk: “As a manager, you need to be mindful of the risks to your firm’s reputation that stem from your actions.”
  • Customer Risk: “Customers, both internal and external, are the lifeblood of an organization. This means doing more than just providing what's asked for — but proactively looking for other ways to add value.”

Other risks to keep in mind for your risk management plan include staffing or skill gap risks, budgetary risks, and supplier risks. This list is far from all-inclusive, but only a starting point for you to build upon.

For more information about risk management programs, read the full article:http://blogs.hbr.org/ashkenas/2011/05/every-manager-is-a-risk-manage.html