A honorable mention to Dr David Hillson, who I interviewed to learn more about risk management. He has given me various insights and new knowledge from his 35+ years of experience as a risk management consultant. Dr David has also wrote at least 16 books on the topic, which I highly recommend for those interested in learning more about risk management.

Life is full of uncertainty, that affects us in various ways. Some uncertainties do not mean much - like feeling undecided about what to eat for breakfast, while others are more impactful - such as achieving our objectives. These uncertainties that matters, are called risks.

Risk Management in a Nutshell

Risk management is about making decisions now, that changes the future. Think about the things that might or might not happen, and decide what can be done now to ensure that the things that we want to happen - presumably good things - happen, and avoid the bad things from happening. It is all about looking forwards into the future, understand what could go right or wrong, and work out a strategy on how to move from how we are now to where we want to be. It really is like time travel. Imagine the future, what things would look like, then return to the present and make decisions on how to move to a more favourable future.

How do you define risk? Uncertainties that matter.

The Risk Management Process

Humans have done risk management for thousands of years (that is why we are not extinct), but the profession and techniques were formalised only during the 1980s. These techniques can be simplified into the risk management process - which consists of only 6/7 questions that are just intuitive, natural questions that everyone would be asking anyways.

To start doing risk management, all you have to do is to know the 6/7 questions to ask (example situation provided):

1- What is the objective?

What would you like to achieve? Let’s say that your objective is to to score well in your upcoming exam.

2- What might affect the objective?

Think of all the things that might affect your objective. In our example, a few of the things that may affect our objective are stress, lack of sleep, and my poor understanding of certain topics or subjects.

3- Which is the most important?

There are countless uncertainties, but not all of it are important. Filter out what you need to focus on the most. As a student that wants to do well in the upcoming exam, I will focus on getting enough sleep so my brain can function properly, and study the topics that I am not confident with.

4- What should be done?

Once we have an objective, and identified what matters, we can start to think about what to do. To ensure I get enough sleep, I will avoid studying late into the night, and go to bed early. In order to maximise the time I have for studying during the day, I will get rid of distractions (e.g. social media), and focus on studying.

Another thing you can do afterwards is inform others about your plan - relevant people can help you to stay on track, and give you feedback on how you are doing.

5- Did it work?

Did the actions you took worked? For example, I got enough sleep and was able to focus on studying the topics I need to emphasises on. However, I was feeling very lifeless and tired, so I decided to tone it down a bit during the evenings and exercise more.

Always reflect on your actions, and see if it is working. If not, you can try something else.

6- What changed?

How did the outcome change? Since I got enough sleep, and was able to focus on the topics that I was weak in, I was able to score well in the exam. I achieved my objective, without any issues such as forgetting what I have studied, having a panic attack, or feeling tired.

Not All Risks are Bad

A misconception about risk management is that all risks are bad. If we go back to the explanation I gave earlier, risk is about uncertainties that matter. Not all uncertainties are bad. Certain uncertainties are good - its called opportunities.

Since you got rid of the distractions, and now has the room to focus on studying, you will get an opportunity to optimise your learning to maximise your learning and understanding with the time you have. It is uncertain whether you will be able to improve your learning, but there is a chance that you will, and its a chance worth taking.

Risk Management as a Life Skill

The Future of Risk Management

For Young Individuals Out There - Some Advice

Thank you for the time, I hope you learned something new from the article that you can apply to your life. Stay tuned for next week’s article!

Dive Deeper

• A short article by Dr David on personal risk management
• The Risk Doctor YouTube channel - Dr David’s YouTube channel with over 200 videos, including shorts, full-length presentations, interviews & webinars on the topic of risk management.