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A Free Risk Management Newsletter, Caretaker - Insight to Risk Logo.

 

Insight to Risk

A Free Risk Management Newsletter

June 2005
Issue 1

 

 

 

 

 

Who is Steve Winks?

 

 

 

 

Everyone should know how to manage risk.

 

 


Follow the "Beginner's Guide" - at no cost!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managing is simply about care and attention.

 

 

 

 

 

 

 

Don't fall prey to the Law of Accident!

 

 

 

 

 

 

 

 


 

Welcome to the first edition of Caretaker. This newsletter is being sent to friends and acquaintances, business owners (large and small), employees (great and humble). In fact, it is being sent to everyone, commercially active or not, that I feel might benefit from more exposure to the world of Risk and Risk Management.

First, a little background…

I have spent the past 30 years involved in the risk management field: as a supplier of products, as head of the risk consulting wing of an international insurance broker and as a risk manager in a multi-national resources company. Over this time, during which the practice of risk management has undergone substantial change, I have learnt many lessons, had many successes (and some failures) and believe that I have gained valuable insight into what works and what doesn’t work in using risk management to add value.

For the past two years, I have run my own risk consultancy, still serving major companies but now extending into the non-corporate world and the realm of non-commercial enterprise. So I have chosen this medium to introduce myself and risk management to a wider audience and to provide useful risk information to a wide range of communities.

It is my intention to produce a monthly newsletter that will be brief (no more than a page or two), will inform across a broad spectrum of interest, will sometimes be amusing but, most importantly, will assist and encourage the practice of risk management in areas were it is presently unknown or under-utilised. So the format, for the next few issues at least, will be two-fold. One section will provide items of interest for readers who have some knowledge of risk management and are keen to widen their exposure; the other section will be A Beginner’s Guide to Risk Management for those readers who have not encountered risk management before or, if they have, did not think it held any value for them.

If you really believe you have no interest in risk management, at all, then just hit the unsubscribe button and I will remove you from the list, but at least read a couple of issues before you decide. On the other hand, if you know someone who may be interested, please pass it on.

Why the name Caretaker? As you will see below in the Beginner’s Guide, risk management is, at its most elementary, simply about care and attention. I have often used an analogy to illustrate the relationship between carefulness and presence of mind. What is a Caretaker? Usually somebody who looks after a property or some other asset. When absent from duty, say on holiday at the beach or at the mall doing the shopping, he/she is not the Caretaker! Take the analogy further – if engrossed in a TV programme or just day-dreaming about that holiday at the beach, is he/she then the Caretaker? You cannot take care if you are not there!

That’s it for the introduction. This next section is aimed at newcomers to the topic of risk management. However, even if you are experienced in this field, I suggest you read on to get another perspective on this ever-changing landscape.

A Beginner’s Guide to Risk Management - First Principles

Let’s start with first principles. What is risk management and who needs it?

As I said in the main section risk management is, at its most elementary, just about care and attention. It is simply about having your mind where the action is. This is the only way you can know all you need to know about a situation and what you have to do about it. That applies to the little decisions we individuals make hundreds of times a day (like choosing between listening to what your child is saying or keeping half an ear on the cricket score) and to the big decisions that groups of people have to consider for weeks and months (like expanding the factory now or in three years time). Therefore, risk management is not just for big corporations; it’s for any business, in fact for any activity, including managing your personal affairs. Eliminating carelessness is an essential aspect of good governance and, of course, good self-management.

We tend to think that things just happen to us, and to some extent they do, but we can influence the consequences of happenings if we just devote more attention to the right things at the right time.

Have you ever heard of the Law of Accident? It states that if your heart and mind are not where your body is then what happens will be accidental, not planned – the typical car crash – “I didn’t see him!” But the truth is that there are no accidents: we choose for the mind to be somewhere else – planning the next project or holiday or even what I am going to say next in this very important meeting – and fail to be aware of what is actually going on around us, or even hear what the other people in that meeting are really saying. It is deliberate – but inefficient!

That’s on the individual level. But this same tendency reveals itself in groups of people as well, for example in companies and government departments. The collective mindset focuses attention on the wrong things. They worry about the aspects that are easily managed and neglect the ones that are difficult to control or that are unpredictable. Why else do 9 out of 10 business start-ups fail within ten years?

Whether we are looking at a large company, a micro business, a sports game or just our personal affairs, success lies to a great extent in the ability to manage the variables and, more importantly, our awareness of those variables.

Now, I am not going to try to change human nature (not in this newsletter at any rate!) but over the next few issues I will share with you some techniques and disciplines that will help you to overcome the consequences of this natural tendency. These tools will develop your understanding of risk and bring more certainty into your enterprise decision-making, whether that is starting a new business or even planning your retirement!

I hope you will join me on this journey.

Best Wishes,
Steve Winks.

Quote of the Month: “The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true.” – James Branch Cabell.

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