How to Minimize Risk?
At all events and circumstances, whether we like it or not, risks are inevitable. We cannot control when it would be going to happen and sometimes we are not prepared for its occurrence.
There are some ways to minimize the effects which could be brought by risks. A well-planned risk management model was created to minimize the effects of risks. The Risk Assessment Management System (RAMS) introduces some steps to identify and minimize the consequences of risks.
a. Identifying the Risks – all risks must be identified and you should consider the details of possible causes and scenarios through inspections.
b. Analyzing the Risks – it is important to determine the possible effects of the risk. This is achieved by determining the causes of the risks and calculating the likelihood and the consequences of the risk occurring.
c. Causes – to know the effects, you must go to root of the problem. You must identify the actual causes of the risk to enable a more accurate forecast of negative impacts that are to be assessed.
d. Likelihood – is the frequency or the probability of the risk to occur.
e. Estimating the Level of the Risk – we could estimate the level of risk by combining the likelihood and consequences of the event occurring.
f. Evaluating the Risk – having analyzed the risk that you must decide whether to accept the level of residual risk.
g. Risk treatment – this involves selecting a treatment option, assessing the appropriateness and effectiveness of the risk treatment option, preparing risk plans and implementing them.
h. Avoiding the Risk – making preferred options or inappropriate risk avoidance. A risk will be able to be avoided by not proceeding with the activity likely to generate the risk but this should not be the automatic preferred option.
i. Reducing the Consequences – making contingency plans to mitigate the consequences of the risk events.
j. Transferring or Sharing the Risks – involves another party bearing or sharing the some parts of the risk. Risk transfer mechanics include the use o the contracts and insurances arrangements.
By following the steps of RAMS, we would be able to minimize the consequences of risks because we would be more prepared for its occurrence. Yet we must bear in our minds that risks are everywhere. Prevention and preparedness is always better to formulate a better solution to the problem. We must stay calm and our minds must be set especially during the occurrence of risk.
(The Risk Assessment Management System was taken from the Risk and Safety Management Seminar –Workshop Handouts. 02-04 May 2012. Mt. Makiling, Los Baños, Laguna.)