With companies being asked to produce more with fewer resources, managing risks is more critical than ever. Sometimes organizations become so accustomed to navigating around their inherent risks that they become complacent in identifying and anticipating them—until something catastrophic happens.

Many businesses face risks such as regulatory, economic, supplier, occupational hazards, environmental, inclement weather, product quality, security and protecting proprietary information. This is why it’s important for businesses to systematically perform a risk assessment of their business operations and activities and implement proactive measures to mitigate them.

The risk management cycle

To manage risk effectively, one must first understand the risk management cycle, which consists of six steps (see figure 1):
1. Define your risk profile
2. Identify potential risk
3. Assess and analyze risk
4. Develop risk mitigation controls
5. Decide and implement
6. Evaluate and monitor

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