Risk in work unit business planning: Assumptions

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You’re the expert There will be differences between the recommendations here and guidelines you have been given within your organisation.

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You’re the expert

The suggested method for risk assessment of the business plan assumes that you are already an expert in your own business. That expertise is also involved in business planning. It also assumes that you have a very good idea of the situations that you must prevent, and of what events might interfere with your normally successful activities. The method does not create that underlying expertise. Not many ‘methods’ could do that. The process identifies and extracts what you already know, to build a shareable picture of confidence and doubt.

It is also assumed that you know what is important to your customers, bosses, and other stakeholders. If you find yourself in doubt about something, this risk management process will prompt you to ask the question.

If you have already been told how to do it, with templates

It is quite likely that you have been given some guidelines already, and that those guidelines include:

  • A template for a risk register, with a row for each risk and columns for per-risk details.
  • A rating scale or matrix for risk consequences or impacts, distinguishing about five levels of impact.
  • A rating scale for risk likelihoods, probability, or frequencies.
  • A look-up matrix that converts the combination of a risk’s likelihood level and consequence level into a combined ‘level of risk’ (or risk severity). This matrix may be brightly coloured.
  • A separate template for registering risk treatments.

There will be differences between the recommendations here and guidelines you have been given within your organisation.

Those differences will not be about one template or scale being better than another. They will be more about the difference between creating real assurance, and populating risk management templates. There will be some tips about managing those differences. There are also models showing how the recommended method can be represented on a whiteboard or on a page. That way you won’t have to invent your own formats and steps while you are busy enough running your actual business and managing its risks. In important areas, the recommended models will look comfortably similar to typical corporate prescriptions.

Please share any experiences with linking this process with on-line corporate ‘risk management’ systems. You can use the Leave a Reply box at the bottom of this page.

The this site’s method is consistent with the Australian Commonwealth Risk Management Policy, the international standard ISO 31000, and by the Australian ISO handbook on applying the international standard (HB 436). Specific templates, scales, and matrices do not appear in any of those sources. ISO 31000 starts out with some key principles for effective risk management (Section 3), and these principles are the central focus of the process recommended here.

Next article:

Risk in work unit business planning: Understanding ‘risk’ for business planning

The focus of business planning is the end of the planning period.

Previous article: Risk in work unit business planning: Overview of the route

Index to the series

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