We live in a very unsure earth. On a daily basis in our schedule work, and lifestyle, we are susceptible to a variety of risks, and liabilities. We can handle, and keep away from many of these adversities individually. Even though, like environment, our businesses, things, and us that are fundamental for our continued existence, are also at risk at most times from diverse recognised, and unidentified factors. This is where Risk Management comes into consequence.

Risk management is the detection, assessment, and ranking risks, followed by synchronized and cost-efficient submission of reserves to reduce, manage, and to be in charge of the possibility, or contact of unfortunate proceedings. Risks can get nearer by imprecision in monetary markets, plan crashes, permissible liabilities, credit threat, calamities, natural reasons, and tragedies as well as planned attacks from an adversary.

Techniques, characterisation, and ambitions vary extensively according to whether the risk management method is in the framework of project management, security, engineering, industrial processes, financial assortment, actuarial assessments, or public health, and safety. The line of attack to manage risk include reassigning the risk to another party, avoiding the risk, reducing the downbeat effect of the risk, and accepting some or all of the penalties of a meticulous risk.

People who study, or work in the Risk Management sector are usually referred to as RM Consultants. The post of risk management consultant is one of the main arrangements in the resourceful panel of any business venture. While they may not be as eye-catching as the other supervisory in the office, risk management consultants are employed, and are paid high-quality money to be the intellect behind precise promotions for improving company procedures.

The job of risk management consultants is to expose, analysing, and evaluating risks. They make recommendations regarding various business sectors. These cover business improvements, administrations, loss controls, and various financing mechanisms. In addition, they manage marketing and selection of business insurances, and hazard related services.

In accumulation, they make available ongoing counselling, and dedicated services such as claiming audits, and review, over viewing of safety programmes, serving as expert witnesses, litigation support, and assessment of third party administrators. Other services comprise enslaved probability studies, captive management, loss amendment aid, broker selection, broker review, agent selection, agent review, disaster planning, employee benefits, and providing evaluations of possible risk, and losses to business professionals.

As autonomous professionals, risk management consultants supply perspective, and objective analysis, and are not concerned with financial profit, or loss. They provide reporting regarding market factors to their client, in addition to working with other business professionals such as accountants, and lawyers. Mostly there are no commissions involved in a risk management position.

Similar to any sports or game, people investing in businesses if do not take bigger risks, they cannot go further on. It may be advisable for to play safe for sometime, but risks have to be taken now, or then. It is up to risk management consultant.<p>

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What should we make of the Bernard Madoff scandal?


The very idea that for decades one of the most visible pillars of the American investment community had been, in effect, running a gigantic scam is hard to believe. Even harder to believe is the fact that so many investors were duped. The total amount lost was first reported at $50Bn, but this number may rise as more and more institutional investors own up to having lost money to Madoff’s scam. Hardest of all to believe though is that US regulators allowed Madoff to get away with it for so long.

A failure of due diligence and regulation

The collapse of Madoff’s investment funds has revealed:
• That individual investors failed to carry out due diligence checks, either because they put their trust in their brokers and advisers, or else because they just did not care so long as they continued to make money;
• That regulators failed to investigate Madoff even when serious concerns were raised that fraud was taking place.

Losses from project failure – much bigger than Madoff

You may be asking yourself what this can possibly have to do with the subject of managing project risks? Two things:

• 1. The amount of money lost — $50Bn — is only about one third of the money lost to project failure in the European Union every single year.
• 2. No-one seemed to conduct a proper risk assessment before committing huge sums of money (sounding familiar?).

Assessing risks: your personal responsibility

So what can you learn from this that will help you manage your projects better? Here are three lessons you can take away from this awful tale:

• 1. Become a disbeliever. When something looks too good to be true it is because it is not true. This piece of advice applies as much to investments that promise 10% or more every year, no matter what, as it does to project reports that forecast no problems.
• 2. You are personally responsible for assessing risks. This is something that you cannot overlook, skimp on or leave to others to do for you. Remember, the buck stops with you.
• 3. Do not take risks that you do not understand. This may seem drastic, but it makes sense. Better to stay away from projects if you are not equipped to manage them.

Conclusion

However bad the Madoff collapse looks right now, it represents a small amount of the money lost each year to failing projects. The next time you are asked to take on a project, remember that it is a high risk venture. Take personal responsibility for assessing risks. If you do that you will increase your chances of success and get a positive return on your investment.

The procedures and processes in your business must be efficient, and you should have methods of operation which take into consideration risk management. When you are designing these processes safety is something which may not necessarily be a major consideration for you, but it definitely should be. There are all sorts of OSHA standards, and I don’t recommend that you break any – however, sometimes OSHA standards in certain circumstances can create unsafe situations.

The reality is that you need to keep your business model and processes within the boundaries of OSHA law to prevent lawsuits, and regulatory fines. Nevertheless, let me explain to you one case study and example, something in my own company prior to retirement which always bothered me. We used pressure washers and steam cleaners to clean fleets of vehicles under contract.

We would wash Rent-A-Cars, company fleets, school buses, post office jeeps, patrol cars, car sales lots, and trucks for trucking companies. When you use a pressure washer over 2500 PSI you are supposed to use a long wand with a 15-degree or greater tip on the end. This allows the water to spray out in a fan so you don’t cut your finger off. That makes sense right? Sure it does.

However, we found that often times school bus yards had school buses parked way to close together. In doing this you could not clean them with a long wand and maneuver between the buses. And if you tried often the wand would catch on this side of the bus, and it would jab the gun into your body. Not good. Especially when it was cold out with ice, or when there was diesel fuel that had leaked on the ground.

That is an accident waiting to happen. Therefore, it made sense to move the buses out to an area where they could be cleaned. Of course trying to get in between buses, and open the door of the engine compartment to start them up, and bleed the system, could have the door coming back and sandwiching your head, while you were on slippery ground. We chose the lesser of two evils and shortened the gun wand length for safety. By doing this we never had another accident. I believe this is a good case study in risk management. Even if we technically violated OSHA rules, safety first I say. Think on it.