Risk definition

Definition: risk is defined as the “effects of uncertainty on objectives” [ISO 31000]

Our Objective: having relaxing times on the beach.
Our Risks: What can happen, that could prevent us from having relaxing times?

Risk identification

Risk or Event?

Risk must have consequences on our Objectives – otherwise it’s an event.
If I’m staying home watching TV, I don’t mind when it’s raining outside – it’s an event.
If I planned to spend the day at the seaside, a rainy day will negatively impact my experience – then it’s a risk.

Risk depends on the context.

Depending on whether I’m spending my holidays by the North Sea, or in Australia, the probability of a shark attack will be obviously different.
Understanding the context is essential to determine risk exposure.

Risk can be invisible

Some risks cannot be identified at first sight, and those are often the most dangerous: when you’re carried away by the current, it’s too late!
Conducting proper study and listening to people who know is the safest way forward !

Risk can be positive, too!

When considering this nice spot – and its untapped potential, you night be thinking of turning your holidays into a profitable business: that’s a good risk!
When positive, risk is often referred to as an Opportunity.

Risk evaluation

Risk is often expressed as a combination of a probability and an impact – helping make informed decisions.

Jellyfish illustrate that fact – you might be likely (high probability) to encounter a harmless (low impact) jellyfish, hopefully less chance (low probability) to be stung by a poisonous one (high impact). You’ll definitely avoid swimming in the sea infested with toxic jellyfish (high probability/high impact).

Risk analysis

the feared event itself -> a snake bite
a source, which will cause the event -> the snake
an impact: the consequence of being bitten -> being infected with the poisonous venom
a vulnerability: a weakness allowing the event to occur -> walking bare foot on the beach

Risk treatment

When risks are known, evaluated and analyzed, it’s time for Risk Treatment.

When you’re bathing, you’re leaving your belongings unattended, exposing yourself to being stolen. From this observation, what are the options?

avoid the risk: avoiding the situation of being exposed to the risk – not going to the beach
accept the risk: accepting being eventually stolen, therefore not taking specific action
share the risk: share the consequences with someone else, e.g. being insured against theft – the insurance company will reimburse (at least partially) and is then sharing the risk with you
process: act on sources, vulnerabilities or impact, to minimize the probability (prevention) and/or the impact (reaction). Prevention measures can be Technical (placing your belongings in a safe) and/or organizational (take turns watching your belongings while others bathe). And when it happens anyway, the best way to react and minimize the impact is to have a Plan (and know exactly what to do at that time)

Outcome

Time to Relax!

Now you’ve identified, analyzed, and processed all your risks, you may spend really safe holiday
Enjoy!