Finding a Balance: Understanding Risk Management

Finding a Balance: Understanding Risk Management

Discover how innovation and positive changes can help reduce negative outcomes.

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Finding a Balance: Understanding Risk Management
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Risk management is about striking a balance. It’s not about incentivizing continued harmful and potentially harmful practices: it’s about implementing policies and technologies that take human behavior into account. Risk management in its simplest form is the controlled factoring in, on a personal and societal level, of potential hazards. Its implementation, in some instances, requires a paradigm shift— a pragmatic strategy to replace outdated approaches and ineffective structures that stand in the way of better outcomes. 

As PMI’s Andrea Costantini, Head of Regional Scientific Engagement for Latin America and Canada, said, “whenever the risk cannot be fully avoided, either because it is impossible or because it is my choice not to avoid it, what I can do is try to minimize the negative consequences and that is: the risk management. ”Statistics, numbers and facts are everywhere, and the sheer amount of information available can be difficult to process. Some people are more experienced in understanding how these statistics and numbers tend to relate to specific instances. In any and every set of circumstances however, an accurate assessment of risk is the only way to begin the process of addressing issues pragmatically. A proper appreciation of risk and its factors can enable solutions and avoid miscalculations.

 

Examples of Risk Management in Our Every Day Lives 

On the road risk management

Driving is inherently risky. This is well known: if an accident happens, harm can happen. Even if someone is a perfect driver, their outcomes are dependent on external factors too: such as other drivers and vehicles on the road, weather conditions and their own state of mind. Airbags and seatbelts were developed for these reasons, and work in tandem with one another. They cannot prevent an accident, but these complimentary risk management devices are the first line of defense in the event of one.

At work risk management

It’s well known that regular exercise is beneficial for an individual’s overall health. What may be ignored is that sitting for too long can also have poor effects on one’s wellbeing. Inactivity due to prolonged sitting can be linked to an increased risk in chronic health problems and other adverse physical and mental effects. Some experts say that a great way to counter this for those with office jobs is to get up regularly and walk around. Stand up while reading emails, keep the trash can away from the desk to induce getting up and to walk around during calls. Tactics like these that incorporate more movement into our days can help reduce the risks associated with uninterrupted sitting.

At home risk detection

Detection systems are used to protect homes from theft, but they can also protect from potential risks associated with fires, poor air quality and hazardous gases. For example, carbon monoxide is a gas that is odorless and colorless, and is found in combustion fumes. This gas is released from stoves, burning wood, and other places. Our senses cannot detect carbon monoxide in the air and its build up over time can lead to severe harm. Alarm systems can detect high amounts of carbon monoxide and alert us, so that we can take immediate measures. 

Whether for cars, homes, businesses or simply in public places in general, detection systems are used to reduce risk. Whether they’re there to detect an ongoing situation or to monitor for safety, these types of systems can help us manage the risk of theft and take action more quickly. 

Risk management, in essence, is about confronting reality.  It’s about understanding human behavior and finding a balanced way to decrease the risk that may be associated with it. Though we’re not able to control everything, a combination of innovation aimed at reducing negative outcomes as well as the positive changing of our practices can help us collectively reduce the risk of harm or the risk of events that could have harmful outcomes from occurring. Promoting the understanding of risk and incorporating this knowledge into the innovation cycle and societal practices is key to making effective changes in people’s lives and their surroundings.

 Whenever the risk cannot be fully avoided, either because it is impossible or because it is my choice not to avoid it, what I can do is try to minimize the negative consequences and that is: the risk management.

– Andrea Costantini, Head of Regional Scientific Engagement for Latin America and Canada
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