Oxford Dictionary defines the term “risk” as a chance or possibility of danger, loss, injury or other. As simple as it sounds, risk is nothing but the negative end of the uncertainty graph. And risk management is the art and science of identifying the risks and mitigating them as and when the need arises.
There are multiple risks we face in our day to day lives along various fronts like health, career, finance and relationships.
Health- The importance of living a healthy life is utmost. We face risks like bring down with diseases, catching the flu etc. which takes a toll on our mental and physical well being. The risk management here means taking care of our eating habits, drinking enough water, exercising daily.
Career- We are in a constant struggle to achieve our dreams. Risks include failing in exams, difficulty in finding a job, getting laid off etc.
We can mitigate them by being more sincere, taking proper guidance, building networks, being more polite and positive towards our co-workers.
Finance- Financial risk is the most widely played with risk across all segments. We take risks with our finances depending upon our risk appetite. Some people are risk averse while some are risk greedy. When having surplus funds we wish to multiply, we invest in different financial instruments like debt, equity, mutual funds, SIP etc. We run the risk of losing our savings depending upon fluctuating interest rates, not being able to support ourselves in old age etc.
The risk management strategies we can adopt here would be not putting all our eggs in one basket, planning our retirement plans smartly, taking insurance schemes and the like.
Relationships- Our inter-personal relationships are the most valued relationships of our lives. We fear the risk of losing ties with them, being ill-treated by them. In order to make sure our relationships thrive, we must make sure to spend enough time with our loved ones to develop a healthy bond, call and visit them whenever possible, treat others how we want to be treated and other things will take care of themselves.
Therefore, risk management is a pervasive term and should be kept in mind that unless we take care of our personal risks, our organizational risks will also not be managed.
Risks should be hedged by finding the solution to only one principle, i.e., Murphy’s Law which states, “Anything that can go wrong will go wrong.”Add to favorites