The opportunity side of risk management

Hi, my name is Carl Pritchard. Today, we're going to be talking about risk management. As soon as you say that, everybody just goes into the depressing mode. It's all the bad things that could happen to us. We could be late. We could be over budget. We could die. It's all the negatives that we tend to go toward. For the past 30 years, I've been preaching the gospel, as it were, of risk management. That gospel is that there are two sides to risk management.

I've been a risk manager for over 30 years. I've written three textbooks on risk management. I'm a big believer that risk management is something that every single one of us should be doing, literally, every single day, and we shouldn't be getting depressed about it. We should be looking at it as an amazing opportunity.

There are two sides to risk: threat and opportunity. Threat is all the bad things that could happen to us. We may be late, we may be over budget—those kinds of things. But it's important. If you want to improve your risk practice today, if you want to start changing the way things are going, effective now, all you have to do is just to make sure that people start speaking risk more clearly. That means, say both the bad things that may happen and also the impact it would cause. The impact, that's the "so what" side of risk management. It goes for both threat and opportunity: yin and yang. It goes for both sides. Opportunity is the good thing that could happen and its influence on us. We need to make sure that we are crystal clear that we not only have the risk event: the thing we're sweating about, but also the impact. You want to improve risk practice. If somebody says, well, there's a big risk here, we could lose Bob. That's fine. But what happens if we lose Bob? Those are the considerations that have to be taken into account. When it comes to risk management, we can take those into account if we treat risk as a team sport.