Risk and How to Identify High Business Risk at the Workplace?

Risk management and risk prevention at the workplace are daily challenges for managers working in any organization. Risk can be serious like potential fire in your plant/factory and embezzlement by senior management staff of the company or minor like employees using company time to conduct their own personal matters. In this article, we will discuss on how to identify risk e.g. business risk, risk of fire, project risk, enterprise risk, environmental risk, etc at the workplace that we as managers, need to be mindful of in order to develop appropriate risk prevention and risk mitigation measures.


To manage risk, we must first identify the risk that can potentially happen at the workplace. Risk is basically some event that may occur in the future and cause negative business impacts to the organization. In the identification of risk which can cause high negative impacts to the company, we utilize the knowledge and experience of our experienced employees who operate the business processes, plant/factory equipments or units. This can be effectively carried out through structured brainstorming or facilitation. The facilitator given the responsibility in carrying out this assignment is someone who should be competent in the facilitation process. In addition, he/she must have the ability to manage the participants in the brainstorming session, especially the participants who are senior management staff.

I remembered an occasion when I was given the assignment to facilitate a group discussion which was attended by a Chief Executive Officer and several Senior General Managers. The Chief Executive Officer did not want to participate at the initial stage of the group discussion. I had a feeling that he was trying to evaluate whether I knew what I was doing. To overcome his resistance, I had to explain patiently to him on the facilitation process during the course of obtaining inputs from the other members of the group. As soon as he was convinced that the facilitation process was working and he was not wasting his time, I could not keep up with him as he was providing some excellent ideas at a very fast pace.

In a typical brainstorming session, the group can easily identify risk relating to business risk, risk of fire, project risk, enterprise risk, environmental risk, etc that can happen in the organization. It will be quite impossible to manage the hundreds of risk identified. Consequently, we need to prioritize the risk identified. Prioritization involves managing risk which has High Seriousness when they happen. What are these risks? We can consider risk with High Seriousness if the risk has negative implications on plant production, Health Safety & Environment, compliance to laws & regulations and the company image.

The other criterion in risk prioritization is to identify the risk probability or likelihood of the risk happening. Will the risk happen? Are existing risk prevention plans put in place by the organization, sufficient and effective? A good example would be risk of "Late Delivery of a critical equipment" required for a new plant. If this critical equipment is delivered late, it will have serious consequences in affecting the completion of the new plant, thus impacting the planned production resulting in business loss. One of the risk prevention measures of minimizing the risk probability which has been adopted by my company is to have a Liquidated and Ascertained Damages (LAD) clause in the contract with the equipment supplier.

The objective assessment of the risk identified, the seriousness and the risk probability is captured in a Risk Matrix or Risk Map. The Risk Matrix is then used as the main reference for managing risk which can cause high business loss to the organization.