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Personal Risk Management

Personal risk management is among the broad range of activities to which we can apply the general principles and lessons of risk management, and New Year can be a great time to do it, explains David Hillson...

Personal risk management is among the broad range of activities to which we can apply the general principles and lessons of risk management, and New Year can be a great time to do it...

By David Hillson

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A common definition of risk is “Any uncertainty which, if it occurs, will have an effect on achievement of one or more objectives.” This generic definition allows us to apply risk management to a broad range of activities, wherever we can define distinct objectives. This includes personal risk management, identifying and managing uncertainties that could affect achievement of our personal objectives.

Defining objectives

As with any other application area, personal risk management can be applied at different levels of detail. The key lies in how well we are able to specify our personal objectives. At the highest level we might say that our aim is to be “happy, healthy, wealthy and wise”, and we can identify and manage strategic personal risks which might affect these broad goals. This might require us to address big issues such as our key personal relationships, diet and exercise regime, or investment and pension policies.

Or we might identify more specific personal objectives such as “Reduce my weight by 20 pounds by the end of June”, or “Learn to speak a foreign language fluently before my summer holidays”, or “Obtain promotion within 12 months.” For each of these specific objectives we can then apply the risk management process to help us reach them.

Threats & opportunities of each scenario

The process is exactly the same as any other application of risk management. After defining objectives, the next step is to identify risks, including both threats which could hinder us as well as opportunities which could help us. For a career development objective for example, downside risks might include the following: I might be assigned to a new job which absorbs all my time and energy; I might invest in training which does not provide the required new skills or knowledge; I might set unrealistic expectations and give up. On the upside, a new opening may arise at work or elsewhere; I might be able to use completely different skills to move into a new area; I might meet someone who offers me my ideal next job.

After risk identification comes assessment, estimating the probability and impact of each identified risk to prioritise them for further action. Simple “high/medium/low” scales can be used for this, enabling the worst threats and best opportunities to be found.

Developing appropriate responses

This needs to be followed by response development, finding appropriate and effective actions to minimise threats and maximise opportunities. Some of these might be simple (talk to my boss or colleagues about possible internal openings; research available training courses), and others may require more effort and investment (obtain coaching to explore my deep-seated personal goals; join professional association to improve networking).

Finally, identified responses need to be implemented, and their effect should be monitored, to see whether they are moving us towards our objective. Where necessary, we should develop new responses, remaining alert to the possibility of secondary risks. And our risk assessment should be updated regularly to find and respond to new threats and opportunities.

Entering a New Year might be a good time to do some personal risk management, reviewing where we are currently in relation to where we want to be, and developing strategies and actions to change where necessary. Risk management is not just for work or business – it can help us achieve our personal objectives as well. Try applying the risk process to your personal life and see what a difference it can make!

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© Copyright January 2006, David Hillson/Risk Doctor Limited

To provide feedback on this Briefing Note, or for more details on how to develop effective risk management, contact the Risk Doctor or visit the Risk Doctor website.

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BOOK NEWS

NOW AVAILABLE, “THE RISK MANAGEMENT UNIVERSE: A GUIDED TOUR” offers an introduction to the many different types of risk management, from strategic through environmental to technical, including fraud, counter-terrorism, reputation and many more. Edited by David Hillson with chapters from domain experts, this major book provides a unique perspective on risk management, click here for details.

“RISKY RHYMES – UNCERTAIN WIT & WISDOM” is an anthology of original risk poetry written by members of the Risk Doctor Network! The 40 poems include limericks, haiku, epics, acrostics, and even a sonnet and a kenning! Each poem reveals something about the nature of risk and its management. This unique compilation costs just GBP £10, or EUR €15, or USD $20 each, including postage & packing. To order your copy now, click here or email info@risk-doctor.com. Remember to supply your mailing address. You can pay by cheque or cash, sent to the Risk Doctor Surgery (address on the website).

The ground-breaking book “UNDERSTANDING & MANAGING RISK ATTITUDE” continues to excite interest. Risk Doctor Network members can get a 25% discount using the order form on the Publications/Books area of our website www.risk-doctor.com.

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MEET THE RISK DOCTOR

2005 was a busy year for overseas travel! Despite the fascination of sharing the risk message in many different cultures, Work-Life balance demands a change for 2006, so fewer overseas trips are planned. January sees trips to Israel, Ireland and Germany, with plans for South Africa, France, Germany and Ireland in February. Risk Doctor services will continue to be available across the globe, so please visit the Events page at www.risk-doctor.com for full details of public events. If there’s nothing currently planned near you, why not contact us to arrange an event.

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GET IN TOUCH


To benefit from our unique blend of leading-edge thinking with practical application, contact us today. Our approach to maximising opportunity and minimising threats will ensure that you get the most from your business and projects. And check out the Publications area of our website www.risk-doctor.com for papers you can download. Risk Doctor & Partners email david@risk-doctor.com visit www.risk-doctor.com or call +44(0)7717 665222