How do you minimize operational risks?

1 Identify operational risks

The first step to minimize operational risks is to identify them. This means finding out what could go wrong in your operations, what are the sources and causes of those risks, and what are the possible impacts and consequences. You can use various methods and tools to identify operational risks, such as brainstorming, interviews, surveys, checklists, audits, incident reports, SWOT analysis, or risk registers. The key is to involve relevant stakeholders, such as managers, employees, customers, suppliers, or regulators, and to document and communicate your findings.

2 Assess operational risks

The next step is to assess the operational risks you have identified. This means evaluating how likely and how severe each risk is, based on the available data and evidence. You can use qualitative or quantitative methods to assess operational risks, such as scoring, ranking, rating, probability, impact, frequency, or severity. The goal is to prioritize the most significant and urgent risks that need your attention and resources. You can use a risk matrix or a heat map to visualize and compare the level of risk for each scenario.

3 Mitigate operational risks

The final step is to mitigate the operational risks you have assessed. This means taking actions to reduce or eliminate the likelihood or impact of each risk, or to transfer or accept the risk if it is unavoidable or acceptable. You can use various strategies and techniques to mitigate operational risks, such as preventive controls, detective controls, corrective actions, contingency plans, insurance, or contracts. The key is to align your risk mitigation plan with your business objectives, budget, and resources, and to monitor and review its effectiveness and efficiency.

4 Manage operational risks

Minimizing operational risks is not a one-time activity, but a continuous process that requires ongoing management. This means updating and revising your risk identification, assessment, and mitigation plan as your operations change and evolve, and as new risks emerge or old ones disappear. You also need to measure and report your risk performance and outcomes, and to learn from your successes and failures. You can use various tools and frameworks to manage operational risks, such as risk dashboards, risk indicators, risk audits, risk reviews, or risk culture.

5 Improve operational risks

Minimizing operational risks is not only about avoiding or reducing losses or disruptions, but also about finding opportunities to improve your operations. This means looking for ways to enhance your processes, systems, people, or external relationships, and to create value for your stakeholders. You can use various methods and tools to improve operational risks, such as benchmarking, best practices, innovation, feedback, or lessons learned. The goal is to foster a positive and proactive attitude towards operational risks, and to leverage them for competitive advantage and growth.

6 Learn operational risks

Minimizing operational risks is also about developing your skills and knowledge in operational planning and project management. This means acquiring and applying the relevant concepts, principles, methods, tools, and frameworks that can help you identify, assess, mitigate, manage, and improve operational risks. You can use various sources and resources to learn operational risks, such as courses, books, articles, podcasts, webinars, mentors, or peers. The key is to keep yourself updated and informed about the latest trends and best practices in operational risk management.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?