By Ruth Hill and the Mind Tools Team
Print

Risk Analysis and Risk Management

Evaluating and Managing Risks

Find out how to do a risk analysis, with James Manktelow and Amy Carlson.

Whatever your role, it's likely that you'll need to make a decision that involves an element of risk at some point.

Risk is made up of two parts: the probability of something going wrong, and the negative consequences if it does.

Risk can be hard to spot, however, let alone prepare for and manage. And, if you're hit by a consequence that you hadn't planned for, costs, time, and reputations could be on the line.

This makes Risk Analysis an essential tool when your work involves risk. It can help you identify and understand the risks that you could face in your role. In turn, this helps you manage these risks, and minimize their impact on your plans.

In this article, we'll look at how you can use Risk Analysis to identify and manage risk effectively.

What is Risk Analysis?

Risk Analysis is a process that helps you identify and manage potential problems that could undermine key business initiatives or projects.

To carry out a Risk Analysis, you must first identify the possible threats that you face, and then estimate the likelihood that these threats will materialize.

Risk Analysis can be complex, as you'll need to draw on detailed information such as project plans, financial data, security protocols, marketing forecasts, and other relevant information. However, it's an essential planning tool, and one that could save time, money, and reputations.

When to Use Risk Analysis

Risk analysis is useful in many situations:...

Access the Full Article

This article is is only available in full within the Mind Tools Club.

Learn More and Join Today

Already a Club member? Log in to finish this article.