What is “Risk”?
Risk is the conjoining of (i) an event that is not desired, and (ii) uncertainty.
This comports with common English usage and everyday common sense.
We use the term “risk” expansively to include (i) compliance with all obligations and (ii) the risk of falling short of a goal to which an organization is committed.
Risk management indirectly creates value. A company is less valuable and less attractive to lenders and investors to the extent that it is seen to be risky. It becomes more valuable as it reduces its risk profile. Thus, a rigorous risk management program creates value.
We help organizations
- Identify, assess and prioritize risks, which begins with (i) identifying risks and (ii) assessing the probabilities of their occurrence and the magnitude of their impacts. In connection with the assessment of risk, a third concept, “velocity of risk”, has emerged and is beginning to be used by thinkers and practitioners in the field.
- Make policies and plans to eliminate or mitigate them, and
- Implement them.
Perhaps most valuable of all, we can help a company create an entire structure and system for risk management, beginning at the board level and extending throughout the company.
Third-Party Risk Management (“TPRM”)
Global supply-chain chaos has been a big problem in recent years.
TPRM deals with the actual and potential risks faced by a company because of its dependencies on companies with which it does business, directly or indirectly.
Not surprisingly, interest in TPRM has exploded.
What is a “crisis”? The word “crisis” to some extent takes its meaning from the context in which it is used. If you think you are in a crisis, you probably are. Unfortunately, you may be in a crisis situation and not know it.
The Chinese word for “crisis”, wēijī, is instructive. It is comprised of two Chinese characters: one (wēi) signifying danger, and the other (jīhuì) denoting “change point”. We think this is a useful — and thought-provoking — way to think about “crisis”.
Crisis management is commonly associated with an event that is already happening, and often means, in effect, “crisis response”, implying that the matter is to some extent out of the control of the interested person or organization.
The term “crisis management” is also sometimes used to mean crisis communications, but it means more than that, it means doing all those things that can or should be done in connection with the matter. Certainly, communications are often of the greatest importance in a crisis.
We can be of assistance to you in connection with crisis management in the following ways:
- As part of our risk management services, we assist clients in setting up crisis and incident response procedures.
- We are the publishers of Survive and Thrive in a Crisis: A Workbook for Resilient Businesses and Resilient Business Leaders. This book pays considerable attention to the mental health needs of all your people during a business crisis. We can supply copies of the book and/or work with you or your advisors, for management education and training. See our Publications page.
- If you are dealing with an actual or imminent crisis, we can help you do a quick assessment of your situation and suggest alternatives. We know crisis management specialists and can help you choose the right team.