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. Then collect smaller risks together that can be managed as a group. Smaller risks have minor financial consequences.
- Risk should not ‘overlap.’ It could lead to the wrong results.
- Avoid too vague risks.
- Lack of imagination. Major disasters are the unimaginable ones that have never happened before. You can always dismiss it later if rigorous analyses show that the risk is unrealistic.