Managing risk is essentially concerned with understanding how things change over time. How fast will things move from manageable, to unmanageable, from having control to not being in control of what happens next? Effective risk management understands what’s important to a person or organization and what patterns, trends, triggers, or relationships might lead to unexpected events.
Which all sounds pretty easy and straight-forward.
At least it does, if your image of risk is fairly static, like a list of things you shouldn’t forget to pay attention to. Also, if your organization is stable in what it is trying to do and where it is doing it, in a society where the laws aren’t changing, people’s tastes or expectations are fixed, where innovation is at a minimum, there’s no pressure from competition or suppliers, natural disasters don’t happen, nations are never in conflict and no one considers health or safety to be of any particular importance.
Given that the last paragraph resembles no place on earth, it’s worth spending some time thinking about the importance of risk and how any meaningful business strategy should prepare for the unexpected.