Risk management is one of the most important steps of maintaining your ISO 9001 Quality Management System. Learning how to develop and maintain a risk and opportunity register makes your firm and QRM run smoothly. There is a lot to learn about risk and opportunity management systems, including:
What Is a Risk and Opportunity Register?
A risk and opportunity register list is your organization’s risks and opportunities. The list should contain at least three columns: the potential impact of each peril or opportunity, its probability of occurrence, and its likelihood of success.
Risk registers can be used for many purposes, including:
- Managing costs
- Managing priorities
- Developing mitigation strategies
Why You Should Use a Risk and Opportunity Register
The risk and opportunity register is an essential tool for any project or business that helps you to focus on the most critical risks and opportunities in your organization. The risk register helps you identify your organization’s potential risks and opportunities, prioritize them, and take action. It allows you to prioritize your actions, see how they are related and communicate with stakeholders about them.
You need to be aware of what risks exist in your business or project before taking any action on them—and this can be done more effectively by using a risk register rather than just one person’s brainpower alone!
To develop a sound risk and opportunity register, you need to go through the following steps:
1. How To Identify Risks and Opportunities
Risk Identification through risk-based thinking is the first step in developing a risk and opportunity register. As a leader or manager, you are charged with identifying and mitigating risks in your organization. The key to doing this is through risk-based thinking. Risk-based thinking involves:
- Identifying risks and opportunities
- Taking action on the identified risks or opportunities (e.g., taking steps to mitigate them)
Does risk identification begin with identifying what could go wrong? How do we know if something will go wrong? This might be difficult for some people who are not used to thinking about these things, but it’s essential! One helpful tip is when making decisions about whether something should happen or not, ask yourself, “Would I want my loved one doing this?”. If the answer isn’t positive, then maybe don’t do it!
2. Risk Analysis
The next step is risk analysis. Risk analysis includes pointing out the possible risks in your organization, assessing their potential impact on your business and how you can manage them. It’s essential to contemplate short-term and long-term risks and their possible outcomes.
The first step is identifying your organization’s financial, operational or reputational risks. You also need to establish whether these are external or internal—and if they’re external, where does it come from?
Once you’ve identified the risks within your organization, you need to assess their potential impact. This will help you determine how much time and effort you should spend managing each.
3. Risk Evaluation
Risk evaluation is the process of assessing the likelihood and impact of a risk. It is an essential step in any organization’s risk management process but requires judgement.
Risk evaluation is a subjective process that requires judgement: you have to decide whether something is likely or unlikely based on your own experience and knowledge, not someone else’s. You may have access only to limited information about specific hazards (e.g., if there was an accident at your workplace last year). In this case, you’ll need to rely on other people’s opinions—but even so, it’s still crucial for them not just to say “yes,” but also to offer reasons why they think yes!
4. Risk Operation and Treatment
Risk operation and treatment are picking and developing responses to risk.
Risk operation and treatment is a deliberate decision-making process based on a risk assessment. The main objective of risk treatment is to reduce or eliminate risks that could cause harm or loss for your organization. Risk treatment may involve mitigation (mitigating) or acceptance (involving). It can also include transfer or sharing among parties with different levels of responsibility for each type of risk (e.g., between suppliers and customers).
When you have a risk treatment plan in place, you can identify appropriate responses to risks based on the severity of each type.
5. Risk Monitoring and Review
A risk register is a vital tool in managing risks because it helps you to identify the most important ones. To use it effectively, you need to know what you’re looking for when reviewing your risk register. Once you have all the information on your firm’s risks and opportunities, you can use the risk and opportunity register to achieve your goals as planned.
Main Take Away
Risk is an inevitable uncertainty, and you should always be ready to deal with each possibility. The best way to deal with risks is by developing a solid framework, such as a risk and opportunity register that helps you foresee and mitigate any risks that come your way.
