What is Risk Awareness?

Risk awareness is the acknowledgement of risks and the active process of reducing or eliminating those risks. You might be thinking “What’s the point, why do I need to know about risk awareness?” First, it’s risk awareness month and secondly, by become aware of risk you will learn how to prevent and prepare for it. We’re going to focus on the incorporation of risk awareness as an organization, but you can implement it into your daily life as well.

How to Create a Risk Awareness Culture

To raise risk awareness in an organization, you must create a risk awareness culture. By create this culture, you could improve and showcase appreciation for the value of managing risk, improvements in safety, lower claims, reduced cost of risk, and better financial results.

Follow some of these tips to create a risk awareness culture:

• Know your business. It is fundamental to understand the dynamics of the business (how it works, what it needs to operate, and the obstacles it faces).
• Earn the trust of senior management. Find creative ways to say “yes” to taking risks.
• Turn colleagues into risk managers.
• Communicate wins and losses. You need to communicate what you do, when losses occur, and when losses are preventing. Managing risk is a collaborative effort no matter how large or small an organization might be.

Misconceptions About Risk

• Thinking that someone else will know better leads to decreased responsibility.
• Thinking that “it is not in my role description.”
• Thinking that “it is the Manger’s role to manage risks.”
• Lack of ability to apprehend the real likelihood of events.
• Not accounting for differences in personal risk tolerance levels.

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Sources: Anya Work Smart, XL Catlin