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How to identify risks? - SilverBulletRisk

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How to identify risks? - SilverBulletRisk
Before starting any systematic risk management efforts, it is crucial to identify the risk that the company is exposed to. The aim of the risk identification process is to establish a catalogue of risks or so called "risk register". While this process usually is relatively intuitive there are few pitfalls that should be taken into consideration.

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Risk register

Before you start risk management, it is important to identify the risks the company is exposed to.
Establish a catalogue of risks or a"risk register"

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Definition of a risk

A risk can be defined as an effect of uncertainty on the objective. It is a different outcome from what you expected and can address, create or result in opportunities and threats.

  • Ri...

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Risk terminology

  • Threat – the source of the risk event that causes uncertainty.
  • Risk exposures – the amount that theoretically is at risk if the threat becomes a reali...

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When identifying risk

Identifying as many risks as possible often leads to not being able to manage it all properly.

  • First, identify the risks with the largest potential loss or financial impact. ...

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Risk identification techniques

One method is to ask the people with knowledge about the functioning of the organization, what could go wrong. It can be done using brainstorming, questionnaires, self-reporting etc. 
The sec...

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SIMILAR ARTICLES & IDEAS:

Scenario planning

It aims to define your critical uncertainties and develop plausible scenarios in order to discuss the impacts and the responses to give for each one of them. If you are aware of what could h...

How to use scenario planning

  1. Identify your driving forces: the big shifts in society, economics, technology and politics in the future and see how it will affect your company.
  2. Identify your critical uncertainties: pick 1-2 of the driving forces (with the most impact).
  3. Develop a range of plausible scenarios: Form a kind of matrix with your two critical uncertainties as axis and depending on what direction each of the uncertainties will take, you are now able to draw four possible scenarios for the future.
  4. Discuss the implications: discuss the various implications and impacts of each scenario and start to reconsider your strategy: set your mission and your goals while taking into account every scenario.

Some pitfalls to avoid

  • Don't fall into the trap is to be paralyzed by the multitude of possibilities. Keep it simple and focus on two major uncertainties.
  • Don't believe that you have to choose one particular scenario and build your strategy around it. Scenario planning is not about choosing just one option for the future but rather dealing with all of the possible outcomes to develop a strategy that will stand the test of all scenarios.
  • When developing your different scenarios, try to not look at the short term. Do not hesitate to look far ahead, anticipating what the market and competitors are going to be over the next years. 

State Of Emergency

The ongoing pandemic is more than just a gigantic health crisis. The global economic order, for the first time in several decades, is on the path to an imminent restructuring.
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Resolve

The measures to stop the spread of the virus are well-known by now: staying home in lockdown, working from home as a default option, schools switching from physical classrooms to e-learning models.

Not every country has been able to make these choices fast, due to a combination of hesitation, inaction, and paralysis. Before any decision is made, the first thing to do is determine what needs to be done and at what pace and scale.

Resilience

As the current health crisis steamrolls into an economic crisis unparalleled for the last 100 years, the decline in economic activity is already at par with the great depression.

This crisis of global proportions requires resilience, both for near-term issues like liquidity and cash flow, as well as long-term issues like uncertainty, personal financial stress and recovering from multiple challenges that were already present and are now further complicated due to the pandemic.

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Body Language

Body Language

While body language cues can offer clues to deceptions, it is often not good enough. More accurate signals are:

  • Intentionally leaving out important details.
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Ask Them to Tell Their Story in Reverse

The passive process of observing a potential liar's body language and facial expressions to spot lies is limited.

Adopt a more active approach by asking the individual to relate their story in reverse order rather than chronological order.

Trust Your Instincts

People often rely on stereotypical behaviors that are often associated with lying such as fidgeting or shifty eyes. But these signs are simply old wives' tales.

Your first gut reactions might be more accurate than any conscious lie detection you might attempt.