a risk anylysis & planning
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Risk Analysis
“Winners don’t do different things, but
they do things differently”
YOU CAN WIN
by Shiv Khera
UNDERSTANDING RISK
As opportunity
To take more risk
To managing risk
Create risk bearing culture
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Risk Analysis
Definition: A systematic, proactive approach to deal with uncertainty
Purpose: to enable the organisations to progress towards its goad in the most direct, efficient and effective manner.
Risk “ imprecations of uncertainty about level of performance achievable
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Definition
Source of risk: any factor which can affect institutions ability to meet its objectives
Risk is not danger rather it is more of opportunity.
Risk imprecations of existence of uncertainty about Institution’s ability to meet its objectives.
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Features of good risk management
Simple
Systematic documentation
Identifies organisations attitude and approach to risk.
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Source of risk
Any factor which can affect ActionAid’s ability to meet its adjectives– e.g. Shift in Institution’s stance towards
greater emphasis on influencing activities Source can have +ve or -ve impact, i.e.
they can reduce or improve ability to meet objectives.
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Opportunity associated
What are the risks and opportunity associated with each sources?e.g. – Risks -ve
Loss of income?Upset local governmentWithdrawal of local support
– Opportunities +veIncrease effectivenesshigher national profile
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Source of uncertainty
Who?– Are the parties involved (stakeholders and non stakeholders)?
What – Is it the partners are interested in (I.e. service or product)?
Why?– What to partners want to achieve?
Which way? – How are the activities to be carried out?
Where?– What resources are regard?
When?– Does it have to be done?
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Risk matrix Risk identification
– Objective– Implications of risk– Source of risk
Risk Assessment– Significant– Probability– Time scale– Assumptions
Risk management– Responses– Likely effectiveness– Action plan– Persona responsible
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Risk identification
ObjectivesRich picture
Source of riskBrainstorming
Implication of uncertainty £
•Stakeholders•Issues•Relations•Environments•Relationships
Analysis (PEST, SWOT)
Source of uncertainty 6WRisk types Risk sources
Market StructureOperating CultureEnvironment People Legal SystemFinance Control processInfrastructure Environment
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Identification of Risk
Use of rich Picture
– Tasks Constructing the
pictureIdentifying the
issue arising from it.
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What is Rich picture?
Interaction of parts within the whole
A plate form to identify sources of risks
Risk mapping with clear view based on objectives
All stakeholders should be in the picture
Indicate and define line as – Relations– Communication– Interaction
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What makes it rich?
Holistic picture, diagrams Complexity relations, interaction, interfaces Make “conflict” explicit typically through appreciation
of different perspectives Include all tensions and risks Things very small but very important Linkage, relational diagrams All stakeholders Messy picture is good and should be fun No risks but pictures Arrow or line different for different size, shape and
clearly explained
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Assessment of external environment
PEST Analysis
– Political Environment – Economic Environment – Socio-cultural Environment– Technological Environment
Five Forces Model
– Risk of entry by potential ‘competitors’
– Bargaining power of ‘suppliers’– Rivalry among existing
organisations– Threat of substitute product– Bargaining power of beneficiaries
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Environments
Resources Technology Technical Administrative Managerial Legal Environmental Social
Financial Communications Knowledge Information Political Commercial Economic Quality
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Stakeholders
Owners Creditors Clients Employees Unions Media Local communities Local Government National Government
Researchers Laboratories Persons in education Supplier Competitors Management Source of new technology Public interest group Religions group
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Responses to risks
R1: modify objectives R2: avoid R3: prevent (Change probability of occurrence)
R4: mitigate (reduce impact)
R5: develop contingency plan (provide reactive capability)
R6: keep option open (delay choice and commitment, versatile options)
R7: monitor ( (keep and update data on problems and impacts)
R8: accept (accept risk and do nothing about it – PREPARED !)
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SWOT Analysis
Potential Internal Strength Potential Internal Weakness
Potential External Opportunities
Potential External Threats
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Fault tree Analysis
Im p ac t
S ou rce o f ris k
Im p ac t
F in a l Im p ac t o f ris k
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Event tree Analysis
D on 't
D on 't
D on 't
D on 't D o
D o
D o
D o
A n even t
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Risk matrixObjective Implication
of uncertainty
Source of risk
Impact on organisation
Likelihood Time scale
Appropriate responses
Assumptions
1 a I
II
III
IV
b I
II
III
IV
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Queries?
Thank You
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