Risk: A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome.
Pasted from <http://en.wikipedia.org/wiki/Risk>
The key words in this definition are uncertainty, possibility and undesirable. But the reality of the matter is that we are all surrounded with risk and in fact we actively manage risk, all day every day. Most every business decision we make is a Risk/Reward evaluation.
The challenge for businesses today is:
- How do we identify the unique risks that we have in our business today
- How do we determine the most important Risks to focus on and address
- How do we find the best resources to effectively manage those Risks
Managing Risk is about identifying the areas in your business where you are unnecessarily spending money, or could potentially spend money, and minimizing the potential of doing so.