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Do You Manage Risk or Does It Just Happen?
Every day you have choices to make. Are they spontaneous decisions, or do you consider the risks you may encounter? Managing risk is a continuous process. First you need to identify and analyze the risk and its impact, then prioritize those risks. Next you develop and implement strategies to mitigate the risks, and track those implementation plans. Finally, you identify your lessons learned and share that knowledge. NASA has it down to a science – you can’t get much riskier than running space missions.

For our example, though, we’ll look at risk management in terms of energy independence. Let’s take a look at the process.

• Risk:  In this first step, NASA identifies risk issues and concerns, so for us it would be that oil supplies decrease while demand soars, resulting in energy prices rising faster than inflation, and investments growing slower than inflation.
   

• Impact:  This is where NASA evaluates, classifies and prioritizes risks. Our biggest is the larger percentage of day-to-day expenses required to cover energy costs.
   

• Risk mitigation strategy:  Now it’s time to decide, as NASA does, what – if anything – should be done about your risks. Research and review alternative energy options. Do a financial analysis of investment versus savings over time for best options.
   

• Track:  You can bet your life that NASA tracks its risk metrics and mitigation plans. Be sure you do the same and note your key lessons learned.
   

• Communicate:  Share what you’ve learned with others. NASA teams most certainly do.

Do you manage risk? NASA has it down to a science – you can’t get much riskier than running space missions.