Risk Management Resources
The Westfall Team Posts Risk Management Resources.
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What is a Risk?
In our global economy, the possibilities of reward are high, but so is the potential for disaster. Risks exist whether we acknowledge them or not. Sticking our heads in the sand and ignoring the risks can lead to "unpleasant surprises" when some of those risks turn into actual problems. Tom Gilb's risk principle illustrates the need for enterprise-wide risk management. "If you don't actively attack the risks, they will actively attack you." To successfully manage our projects and products and reap the rewards, we must learn to identify, analyze, plan for, track, and control our risks.
The future seems to be coming at us at an ever-increasing rate. As effective managers and practitioners, we must think proactively about all of the possibilities that the future may bring, but those possibilities have uncertain outcomes. We call those possibilities opportunities if we believe they will have positive outcomes. For example, we have the opportunity to complete a project and make a substantial profit, or we have an opportunity to introduce a new product into the marketplace first and capture the lion’s share of that market. We call those possibilities risks if we believe they will have negative outcomes. For example, we have the risk of not completing that same project and losing our investment, or we may have the risk of our competition beating us to the marketplace with a new product and losing market share. To quote Tom DeMarco, “Moving aggressively after opportunity means running toward rather than away from risk.”