The current and past global pandemics have taught us that Risk Management is one of the most important things that we have to embark on to ensure the survival of organisations. Risk Management practices should be made visible and be implemented in projects, portfolios, programs, business undertakings and organisations moving forward.

It’s a life skill. Human beings have learned and developed Risk Management skills adequately in response to uncertainties since time immemorial in all aspects, including the environment, harmony among nations, technological developments, health, relationships and the family. Organisations and countries have grown by adapting to changes and risks that have affected the world for thousands of years.

Focus on uncertainties

It’s pivotal for organisations to learn to get it right with regards to the implementation of Risk Management practices because this is essential and timely. Risk Management practices need to be focused on all uncertainties that matter to an organisation.

Many organisations have a very narrow view of Risk Management practices. They end up managing only a number of risks and not all the risks affecting the organisation. Failure to uncover or address all risks that matter are diverting organisations away from adapting Risk Management as an integral part of organisational growth. This is, in turn, pushing organisations to take many more risks they are unaware of, thus resulting in project cost overruns, abundance or failure.

Four categories of risk

The current global pandemic has taught organisations to realise that Risk Management needs to be addressed and mitigated in four categories:

1. Risk related to unforeseen future events or exposures that are unknown to us. These either happen or they don't; risk which is unknown. In short, it might hit or miss.

2. Risk related to variability as the focus is about the results, not events as in Category 1. We know that something is going to happen from the short list we have but unaware which will emerge. In short, the future event is certain but the effect is unknown.

3. Risk related to ambiguity. This is due to lack of knowledge and information in order to know and act on what we are facing. In short, we know something is going to happen but we just don’t understand or have no idea. It increases as we move forward and might turn into something much bigger.

4. Risk related to emergence. COVID-19 is a typical example. Things outside our framework; things of which we don’t have a concept, beyond the current world view and risk which is unknowable or we have no way of knowing.

All of the above are important for the world moving forward the post-COVID-19 pandemic to ensure mitigating similar future occurrences.

Organisations must adapt Risk Management practices as defined forward-looking radar to uncover all uncertainties that matter to our organisations while uncovering all opportunities that come along the journey towards organisational exponential success.

-- BERNAMA

Dr Barathan Muniyandy, a thought leader and risk management practitioner and trainer, is CEO of Handal Group Malaysia – a comprehensive Risk Management & Corporate Intelligence Consulting Group that has been advising business organisations and governments in Asia over the past 25 years.