Risk Assessment: Threats and Opportunities

January 7, 2017

in Manage Risk

Risk Assessment is part of an overall Risk Management process that includes:

  • Risk Assessment
  • Risk Response
  • Risk Monitoring

The Risk Assessment piece is composed of listing threats that exist and analyzing how our “defenses” or “mitigations” will be able to handle those threats. The end product is a “risk status” that allows us to concentrate efforts on the threats that are the most dangerous.

In addition to negative threats, we also need to look at positive “threats” or opportunities. On the positive side, instead of reductions, we look for means to amplify opportunities.

Here are some threats to consider:

  • Natural causes
    • Weather – storms, floods, drought, solar flare
    • Earth movement – earthquake, sunami, landslide
    • Epidemic
  • Human causes
    • Conflict – war, terrorism, riots
    • Economic – recession/depression, inflation/deflation
    • Failures – power, communications, contamination

Each of these threats will have a different level of importance to us depending on our circumstances and location, the probability of occurrence of each event, and our ability to minimize their effect upon us.

Here are some opportunities to consider:

  • Knowledge
    • Increase in quantity
    • Increase in quality
    • Increase in availability
    • Increase in processing capability
  • Finance
    • Sudden short term gain
    • Steady long term gain
    • Financial independence
  • Health
    • Free from disease
    • Extended aging/lifetime
    • Corrections
    • Enhancements
  • Energy
    • Increase in availability
    • Decrease in cost
    • Increase in ability to store
    • Decrease of need
  • Self Sufficiency
    • Short term stored supplies
    • Long term stored supplies
    • Production for an indefinite term
    • Production of surplus
    • Trading

As with threats, we also need to establish a personal level of importance which will depend upon our circumstances and location, the probability of occurrence of each event, and our ability to MAXIMIZE their effect upon us.

The objective is to analyze each threat/opportunity for probability or likelihood of occurrence and then balance that against our ability to deal with the events (minimize effect for threats, maximize benefit for opportunities) to create a risk status. The risk status shows us which areas we should focus our efforts on improving.

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