How to Proactively Respond to Risk
When we consider all of the risks in our world today – including an ongoing pandemic – it can seem overwhelming. But there’s a way to proactively prepare for risks and save you worry, time, and money. Specifically, businesses have been using risk management techniques that you can apply to your personal life using these three steps:
Identify the Risks
Evaluate the Risks
Respond to the Risks
Let’s break it down further. Risk is considered something that could have a negative (or even positive) impact on a goal. The idea is to prepare for it and be ready if it happens, whether it actually does or not. It’s like living in a hurricane-prone area where you always need to have emergency supplies and know your evacuation route. You don’t know if or when a hurricane may occur, but you’re prepared for it to happen. Here’s how to get ready.
Identify the Risks
The first step is to recognize the risks that could impact you. It helps to think about potential risks in different areas of your life, like health, finances, work, marriage, etc. In thinking about these areas, consider questions like:
What could go wrong with our finances?
What could negatively impact our family’s quality of life, our work, our kids’ education, or our health and safety?
What natural or manmade disasters could impact us?
What if…?
For parents with kids in school, one of the big questions we have right now is what do we do if schools switch to remote or hybrid learning due to the pandemic, and how will we address the change in schedule and childcare? Let’s evaluate these risks to know how to address them.
By Natalia Varlamova, sourced from Shutterstock
Evaluate the Risks
The next step is to evaluate the risks you’ve identified to see which are the most relevant to your family. To do this, determine how likely each risk is to occur and how much it will impact your family if it does.
Likelihood: The probability of the risk occuring
Impact: How much a risk will affect your family if it occurs
Classify the impact and likelihood of various risks as high, medium, or low. To start the conversation, you can ask these questions:
What is the impact of this risk to our family—high, medium, or low?
What is the probability of this risk occurring—high, medium, or low?
Focus first on the risks that are most likely and have the highest potential impact. Ask yourself, What risks are urgent and must be addressed now? Low-impact and low-likelihood risks are the least important. For example, planning what to do if an asteroid strikes your area probably isn’t worth your time, whereas planning for your kids switching to remote learning probably is. You may find some urgent risks that require immediate attention, in which case you should move straight to developing responses for those risks.
Respond to the Risks
A risk response is your plan to address or resolve a risk should it happen. Your response should be in accordance with the level of potential impact; larger impacts will require a larger response, while smaller impacts will require a smaller one. There’s no need to overengineer the response for each risk.
Responses to significant risks are worth a lengthy conversation with your partner to find solutions you can agree on. During your discussion, consider the following questions:
What can we do about a given risk?
What is the best way to address it?
What steps do we need to take now to be ready, should it occur?
There could be several different options to consider for each risk. For example, if your kids’ school switches to remote schooling, would you want a relative, neighbor, or childcare facility to provide backup childcare? Talk it through until you have a plan that you’re both comfortable with, knowing that the plan can be updated and tweaked in the future.
Once you know what your response will be, get ready. For example, now would be a good time to talk to your boss about scheduling options if you need to supervise your children at home. It may also take time to interview and check references for backup babysitters or visit childcare facilities. A plan isn’t helpful unless it’s ready to be implemented, so discuss who’s responsible for each related task to be ready for each risk. If you’re prepared in advance, you’ll be able to sleep better at night and be ready to put your plan into action.
Finding ways to prepare for unexpected surprises protects what is important to your family. It may take some work, but the peace of mind is worth the effort. And we all could use some of that these days.
To help you work through this risk management process, I’ve made available a template you can download here. It also includes a list of potential risks and responses to get you started. Good luck!
Hilary Kinney is the author of Project Management for Parents, a timeless book that provides resources for busy parents to streamline life at home. She is a certified Professional Project Manager with 17 years of experience at a Fortune 500 company.