Risk Awareness

Risk Awareness

Risk Awareness Jonathan Poland

Risk awareness refers to the extent to which people or organizations are aware of risks and the strategies in place to manage them. This can include understanding the potential consequences of risks, as well as the measures that are in place to mitigate or prevent those risks. Risk awareness is an important aspect of risk management, as it enables individuals and organizations to make informed decisions about how to handle potential risks.

Risk awareness can vary at different levels, including within societies, organizations, groups, and individuals. It is important for organizations to cultivate a culture of risk awareness, as this can help to identify and address potential risks more effectively. This can involve providing training and resources to help people understand risks and risk management strategies, as well as promoting open communication and transparency about risks.

Unawareness
Unawareness of risk such as an individual who purchases a home in an area at high risk for forest fires without any knowledge of this risk.

Risk Identification
Performing the due diligence to identify risks such as a home buyer who researches the air quality in an area before purchasing a house.

Risk Analysis
Analyzing identified risks including factors such as probability, impact and moment of risk.

Optimism Bias
Risk identification and analysis that is performed with an optimism bias. For example, happily assuming that interest rates will go down soon in a financial risk calculation.

Defensive Pessimism
Using defensive pessimism to identify risks and conservative estimates of risk probability and impact.

Motivated Reasoning
Understating or overstating risks due to motivated reasoning. For example, a project manager who is eager to please an executive so they underestimate the risk a project could be late or over budget.

Unknown Risks
A risk that is missed by risk identification due to optimism bias, motivated reasoning or unknown unknowns.

Un-communicated Risk
A risk that is fully documented somewhere that becomes knowledge waste due to a lack of communication.

Communicated Risk
A risk that has been communicated to anyone it can impact.

Dread Risk
Dread risk is a class of risk that people find particularly fearsome or emotional. This tends to result in an overestimate of such risks and a desire to minimize such risks whatever the cost. Awareness of dread risks is typically high but they may be surrounded in popular misperceptions.

Risk Comprehension
A risk may be communicated without many people actually taking interest or fully understanding the risk. Risk comprehension is the degree to which people actually understand a risk including its probability, impact and treatment. This may require over-communicating a risk using storytelling to make the information consumable. For example, a government that communicates the health risks of smoking for many decades using mass media and education systems.

Risk Culture
Risk culture are the norms, expectations and processes that a society, organization or group uses to identify, assess, communicate and manage risk. For example, a manufacturing firm where it is a norm for managers to communicate safety risks on an regular basis such that safety risks and preventative measures are well understood.

Learn More
Retrenchment Strategy Jonathan Poland

Retrenchment Strategy

Retrenchment is a business strategy that involves reducing the size or scope of a company in order to improve efficiency…

One Stop Shop Jonathan Poland

One Stop Shop

A one stop shop model is a business model in which a single company or organization offers a wide range…

Keep It Super Simple Jonathan Poland

Keep It Super Simple

Keep it Super Simple or Keep it Simple Stupid. The KISS principle is a design guideline that suggests that unnecessary…

Micromarketing Jonathan Poland

Micromarketing

Micromarketing is a marketing strategy that involves targeting a small, highly specific group of customers with tailored products, prices, and…

Internal Communication Jonathan Poland

Internal Communication

Internal communication is the exchange of information within an organization that is designed to help it achieve its goals. This…

Product Differentiation Jonathan Poland

Product Differentiation

Product differentiation is the unique value that a product offers on the market. This value can come from a variety…

Sales Objections Jonathan Poland

Sales Objections

A sales objection is a concern or hesitation that a customer has about making a purchase. Identifying and addressing these…

Sales Goals Jonathan Poland

Sales Goals

Sales goals are targets for the revenue or units sold that a sales team or individual is expected to achieve…

Service Quality Jonathan Poland

Service Quality

Service Quality is determined by the value it holds for customers. This value can vary from person to person and…

Latest Thinking

Qualified Small Business Stock (QSBS) Jonathan Poland

Qualified Small Business Stock (QSBS)

Qualified Small Business Stock (QSBS) refers to a special classification of stock in the United States that offers significant tax…

Barrick Gold Jonathan Poland

Barrick Gold

Barrick Gold Corporation (NYSE: GOLD) is a significant player in the global economy, particularly within the gold mining industry. Its…

Newmont Corporation Jonathan Poland

Newmont Corporation

Newmont Corporation (NYSE: NEM), being the world’s largest gold mining corporation, with extensive operations in mining and production of not…

Gold is Money Jonathan Poland

Gold is Money

Overview The history of gold as money spans thousands of years and has played a pivotal role in the economic…

What is Leadership? Jonathan Poland

What is Leadership?

In the modern business world, where rapid changes, technological advancements, and global challenges are the norm, effective leadership is more…

Product Durability Jonathan Poland

Product Durability

A durable product, often referred to as a durable good, is a product that does not quickly wear out or,…

Durable Competitive Advantage Jonathan Poland

Durable Competitive Advantage

The most important aspect of durability is market fit. Unique super simple products or services that does change much if…

Praxeology Jonathan Poland

Praxeology

Praxeology is the study of human action, particularly as it pertains to decision-making and the pursuit of goals. The term…

Business Models Jonathan Poland

Business Models

Business models define how a company creates, delivers, and captures value. There are numerous business models, each tailored to specific…