Risk Assessment: A Simple Approach When Making Life Goals

risk assessment and management
Photo by Flo Maderebner: https://www.pexels.com/photo/two-man-hiking-on-snow-mountain-869258/

How to simply and effectively assess risk to aid your contingency planning and achieve your life goals

Which risks are you facing? How do you identify the biggest risks? How do you do a simple risk assessment and make contingency plans?

Everything has an element of risk. We might decide to act or to do nothing but both options carry risk. If we want to achieve big goals and dreams then we will certainly face risks, but these don’t necessarily need to stop us. But we do need to acknowledge and plan for the most serious risks if we want to successfully achieve our mission. Therefore identifying, assessing, and managing risk is an important part of completing our life goals.

“Great deeds are usually wrought at great risks.” – Herodotus

When risk becomes reality

The wind was so strong that the thunderous gusts were slapping the tent roof down into our faces. I lay there in the dark praying that the shelter would survive as the poles were continually flexed and bent by the invisible, but highly audible, attacker. 

The camp was high on a glacier with little protection from the arctic storm. We were there to explore some of Greenland’s unscaled peaks, but at that moment no one was thinking of stepping anywhere outside the tent. We could only lie there, feeling pretty helpless.

Then, as the poles were cruelly buckled once again, I heard a shark crack, only just distinct above the noise of the storm. There was little to see in the darkness, but the tent had lost some of its shape and now some of the canvas was lying against my face. Not good. 

A little preparation saves the day

It was the middle of the night. We were at least a day’s travel from any habitation, and no one was launching a rescue mission in this weather even if we could contact them. The air temperature was generally around -20 degrees Celsius or lower, but with the wind chill it could be double that. If we lost our tent we would be fully exposed to the elements and would be at serious risk of cold injury or death. With the structural integrity of the tent compromised and the storm still raging, it was a long night; me holding a prayerful vigil for our survival all the while. 

Thankfully, after some hours, a pale dawn crawled in, and the winds dissipated and then ceased completely. The resulting quiet was eerie; made even more so by the snow banked up on the tent that muffled every sound. We dug ourselves out from the entrance to survey the scene. The tent had been largely buried but in our case that had been a mercy, as the snowy shroud had helped protect the sides from the gale.

After we had dug out the accommodation, I was able to examine the broken pole. The carbon fibre was splintered close to one of the connection points. I got out the emergency repair kit and looked through the few precious items we had with us. Fortunately, we had foreseen this risk and although we could not carry a complete set of spare poles, we did have a metal sleeve that could slide over the damaged section and be taped in place as a splint. It was not a pretty repair, but it worked. It was enough to ensure that the tent – and we – survived the rest of the expedition. 

When to identify, assess and manage risk

One of my life goals was to make at least one first ski ascent and descent of a mountain. The expedition to Greenland saw that goal fulfilled but the whole venture was full of risk. As well as storms there were polar bears, crevasses and the chance of injury, often days travel from the nearest help. But that didn’t stop us; we just planned and acted to mitigate these risks. 

As with my adventure, the risks we face to achieve our goals can be daunting. That’s why you don’t want to think about risk as the first thing when considering big life goals. If you do, the problems could easily put you off before you even start.  But, if you plan without considering the risk, you could quickly become disillusioned or make a serious mistake that could be hard to recover from.  Therefore, it is at the point when we have a clear idea of what we want to achieve, and are then considering different options to achieve that goal, that we look at risks.

That is why in The Right Questions Framework we consider risk as part of the ‘which’ question, having already thought about the ‘why’, ‘where’ and ‘what’. 

Unnecessary risks can be avoided by careful planning and this process is part of your risk management process.  Your approach to risk – which risks you tolerate and those you treat – becomes your risk management strategy.

“Take calculated risks.  That is quite different from being rash.”  General George S Patton

The Right Questions Emergency Repairs and Spares Kit Tool: risk assessment and contingency planning

One way to treat risk and reduce its impact on an expedition is by carrying emergency equipment and spares. But if we were to carry too much, we would cause ourselves other problems. So, we need to limit what we take to the absolute essentials. Therefore, when it comes to The Right Questions Emergency Kit Tool, we identify and focus on the ten most critical risks. 

This is how you can use this tool to identify, assess and manage the key risk that you face.

Here is a simple risk identification and assessment process. If you follow this exercise, you will be able to ascertain your key risks, analyse them, and create a basic risk management strategy:

1. Risk Identification – how to identify risks

  • Play devil’s advocate for a moment. Give yourself 5 minutes to try and think of as many things as you can that could put a stop to your venture and list all these threats.

2. Risk assessment – how to analyse likelihood and impact

  • Give each risk a likelihood score. Use a scale of 1 to 5 of how likely it is to occur (5 being the most probable).
  • Now do something similar, scoring 1 to 5 for the severity of the impact of each of the risks.  In this case, a ‘1’ might be a minor inconvenience whereas a ‘5’ would be a show-stopper.
  • For each risk multiply the probability score and the impact score. You will then get a score of 1-25 for each risk.  You can now list all the risks by rank in a table.

3. Risk mitigation and management – how to tolerate or treat the risks

  • Identify your top 10 risks for further analysis.
  • Start at the top with the biggest risks and think about how you can avoid, prevent, limit the damage, or otherwise manage the risk.  This is called mitigation or treating the risk.  Write down the plan for each risk.
  • Then, after the mitigation measures have been applied score the risk again. Do this for likelihood and impact to see how it has improved and whether it is acceptable to you.
  • Sometimes we cannot treat a risk and reduce its likelihood or impact any further. At this point, we must choose to either tolerate (accept) the individual risk or decide that we need another goal or plan. 
  • Finally, consider all the risks together against achieving your goal. Decide whether the opportunities outweigh the dangers for the goal you have chosen.

Worked examples

Risk assessment example 1 

For example, on an expedition, there are risks that are common but not necessarily catastrophic (high likelihood and low impact), such as poor weather. We might consider the likelihood of bad weather as being a 3 or 4, but if we mitigate the situation by taking waterproofs or warm clothing then the impact of that risk might only be a 1 or 2.

And then there are risks, which are less likely but more hazardous (low likelihood, high impact), such as an accident where someone gets injured. That is why we carry a first aid kit. Equally, as per the story I shared, a critical piece of equipment could get damaged and that is why we carry an emergency repair kit. 

Risk assessment example 2

The same goes for our life goals. One dream might be to start your own business. This carries the risk of a reduced income, particularly at the beginning. So we might say the likelihood was 3 or 4. The loss of security, having given up a regular work position, depends upon our financial position. The impact for a single person with few outgoings might be low, say 2-3, but for someone with a family and mortgage, it could be significantly higher so we would likely want to treat the risk. This was the case when I started my own business. 

This risk could be mitigated in various ways. The business could be initially set up as a side hustle that you do in your spare time. Perhaps you could reduce your hours and work part-time in your present role leaving time for your new business. Or you might build up some savings before leaving full-time employment to act as a financial buffer. There are lots of options but the aim is to find the right balance for you, one that allows you to minimise the risk in your particular situation while still achieving your aim. 

“Decide whether or not the goal is worth the risks involved. If it is, stop worrying.” – Amelia Earhart

Don’t be paralysed by risk. Identify, assess, mitigate then get moving

There will be risk. Accidents and mistakes will happen. That is life. If we want to press forward and achieve our goals, we need to accept that. As management guru Peter Drucker points out: 

“People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.” – Peter Drucker

Using the ‘Emergency Kit Tool’ and doing a risk assessment is a helpful aid to decision-making, but remember, don’t make a decision out of fear.  Some risks will be big – you just need to know whether that danger is acceptable to achieve your aim.  We consider the risk and then we manage it. 

Effective risk management helps us to achieve our mission, with the risks considered and reduced as much as possible, but not at the exclusion of risk entirely.  Remember, it is more important to do the right thing than the safest thing. Don’t let fear stop you from acting if it’s the right thing to do and the risk is acceptable. As to fear, we will talk about that some more in the next section. 

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