Quiz: Are You Managing Business Risk Effectively?

Work through this quiz about managing risk and note down your responses to the questions. Once you’ve done this, you'll have the chance to convert your answers into points. Your final score will show how effectively you are managing risk in your organisation.

1. Do you have a risk register listing the risks you have identified?

• A. A risk what?
• B. Yes, but it is out of date
• C. Yes, and it is up to date
• D. Yes, and it is up to date and regularly reviewed, and actions have been taken to mitigate these risks

2. How is your business-critical computer data backed up?

• A. It isn’t backed up at all
• B. It is backed up on the same site
• C. It is backed up to a different site
• D. We have a coherent backup strategy in which data is backed up to multiple off-site locations and we have tested that it can be restored when necessary

3. How do you manage key skills in your organisation?

• A. Key skills have been identified and recorded, and training and succession planning take these into account
• B. We have tried to ensure that key skills are shared by at least two people in the organisation, in case one of them leaves
• C. Someone else is responsible for everything to do with skills and training
• D. There are some things that only one person knows how to do

4. Which of the following tactics have you used to manage risk? (Pick all that apply)

• A. Avoidance of the risk, eliminating it entirely
• B. Reduction of the risk, making it less likely to occur or less damaging if it does occur
• C. Transferring the risk to a third party, for example by using outsourcing or insurance
• D. Retaining the risk, having evaluated it and budgeted for its possible occurrence

5. How do you prioritise the risks faced by your business?

• A. In order of probability, most likely first
• B. In order of cost, most expensive first
• C. Using a combination of probability and cost
• D. Risks are not prioritised at all

6. Which of the following best represents your view of risk management?

• A. It is not possible to predict what will happen so risk management is a waste of time
• B. Our competitors face the same risks we do, so risk management doesn’t help us to gain a competitive advantage
• C. Although there will still be unforeseen problems faced by the business, risk management will help to minimise these
• D. Risk management, if done thoroughly, can solve all our problems

7. Who is involved in your risk management process?

• A. Everyone in the business is encouraged to contribute
• B. Only team leaders and managers are involved with recording and handling risks
• C. Risk management is ad hoc and different parts of the business handle it in different ways
• D. Only the very senior management look at risk for the enterprise as a whole

8. Do you do Business Continuity Planning (BCP)?

• A. No, what’s that?
• B. I think more senior managers in the organisation do it
• C. Yes, it’s important that we are able to carry on trading in all circumstances
• D. We do some BCP, but there’s probably more we could do

Answers

Award yourself points as follows.

Q1 A 0, B 0, C 1, D 2

Q2 A 0, B 0, C 1, D 2

Q3 A 2, B 1, C 0, D 0

Q4 Add half a point for each tactic you have used

Q5 A 1, B 1, C 2, D 0

Q6 A 0, B 0, C 2, D 0

Q7 A 2, B 1, C 0, D 0

Q8 A 0, B 1, C 2, D 1

Rating

0–4 You probably already realise that your management of risk is not adequate. Although each individual risk faced by your business may have a low probability of occurring, there are lots of them. When taken as a group, you can be sure that your business will suffer adverse effects from events that you could have foreseen and counteracted. Ask your employer for training in risk management and seek to change the organisational culture if risk management is not seen as a high priority.

5–11 You understand how to manage risk, and take active steps to do so. However, there is more you could do. This questionnaire should have given you some pointers about things you could do differently to better manage the risks faced by your organisation. Training or mentoring may help you to fill in the gaps, and help you to protect your project and the organisation as a whole against potentially expensive events.

12–16 Well done! You have scored very highly, indicating that you are already managing risk well. Although you are following the steps necessary for risk management, you must also ensure that you spend sufficient time on these tasks and go into them in enough detail to really get the most out of the process. Make sure everyone around you understands the importance of managing risks, reducing the likelihood of things being missed. You might find it useful to trade critiques of risk management procedures and documents with one of your peers.