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Risk and Opportunity Management

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Risk and Opportunity Management

Risk and opportunity are flip-sides of the same coin.  One person's risk is another's opportunity.  Taking a risk is exploring opportunity.  Seizing an opportunity is taking a risk.  Perhaps for too long businesses have seen risk in a negative way.  What I call downside risk.  All too often the decision process concentrates on the downside of risk:  If I take this course of action, there is a risk I will fail, lose money, damage my reputation, limit my options.  As a result, the risk is to be avoided and no action is taken.  But what of the risk of not taking action?  Are there opportunities being missed because of fear that negative outcomes will come home to roost?

People, organisations and businesses all have their own attitude to taking risk.  This is known as the risk appetite.  It can range from ultra-cautious: where few risks are taken and decisions are slow to be made (opportunities often expire) to reckless gambling where the outcomes are poorly thought out and decisions are made impulsively (unknown consequences suddenly present themselves).

Striking a balance between taking too much risk or shying away from opportunity is a tricky business, often relying on instinct as much as sound evaluation. Risk and Opportunity Management seeks to formalise the evaluation process.  It allows people to consider the range of options, the impact of decisions and the likelihood of particular outcomes.

If you want to avoid the worst of outcomes, maximise return on risky decisions and explore opportunities while protecting your reputation and assets, risk management is a fundamental discipline

A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties.

Harry S. Truman

Don't be afraid of missing opportunities. Behind every failure is an opportunity somebody wishes they had missed.

Lily Tomlin

We are continually faced by great opportunities brilliantly disguised as insoluble problems.

Lee Iacocca

Risk comes from not knowing what you're doing.

Warren Buffett

Often the difference between a successful person and a failure is not one has better abilities or ideas, but the courage that one has to bet on one's ideas, to take a calculated risk - and to act.

Vince Lombardi

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