Pieter Vos: Risk assessment as a management tool

"Dad," my son said one day, "I lack direction. I feel like I'm 'just winging it' in my job." He finished his college education and found a nice job. "And you know," he continues, "when I attend meetings, or hear conversations around me during lunch breaks, I get a strong sense that the same applies to a lot of others." I can understand his despair. He is young, has a fresh mind and perceives things keenly. In fact, I recognize the things he signals. Many people and companies 'just wing it.'

As Nutrilab, we are accredited to ISO 17025. In 2018, the standard was renewed with the obligation to perform risk analyses. "A lot of hassle" many business owners thought. "All those rules you have to comply with..." Meanwhile, however, I consider it a valuable tool in the management toolbox. Especially if you extend risk analysis, it teaches you to see where blood can flow in the company.

Chance x effect = risk profile. 

Suppose you want to know the risk of an incomplete personnel file on the survival of your company. You calculate that the probability of an error, such as missing a performance report, is 5%. However, its effect on the survival of your company is zero. So the risk is zero. Nice! Another question: how great is the risk of not being able to deliver a product someday? You consider the probability of insufficient raw material, of power failure, of a sudden shortage of staff, and so on. You examine their effect on production.  

If you regularly take a serious look at this risk profile and put it on the MT agenda, you can start focusing on it. This allows you to have much more control over your processes. It gives you direction. As an entrepreneur you don't 'just wing it'!

Pieter Vos
Director Nutrilab