Elephant risks are high-impact, high-consequence risks that are often overlooked in risk management. They can be difficult to identify and assess because by their very nature people try to avoid them. They can be costly to mitigate too! However, there are several things that can be done to overcome the challenges of elephant risk management. This article was inspired by the IRM’s Fundamentals of Risk Management Training course.
Here are a few tips:
- Create a culture of open communication. Elephant risks are often overlooked because people are afraid to speak up about them. Creating a culture of open communication where people feel comfortable raising concerns is essential for identifying and managing elephant risks.
- Use a variety of risk identification techniques. No single risk identification technique is perfect. Using a variety of techniques, such as brainstorming, interviews, and scenario analysis, can help to identify a wider range of elephant risks.
- Assess the impact and likelihood of elephant risks. It is important to assess the impact and likelihood of these risks in order to prioritize them and allocate resources accordingly. This can be a difficult task, but it is essential for effective risk management.
- Develop and implement risk mitigation strategies. Once elephant risks have been identified and assessed, it is important to develop and implement risk mitigation strategies. This may involve reducing the likelihood of the risk occurring, reducing the impact of the risk if it does occur, or transferring the risk to another party.
- Monitor and review elephant risks. They are dynamic and can change over time. It is important to monitor and review these risks on a regular basis to ensure that they are still being managed effectively.
By following these tips, organizations can overcome the challenges of elephant risk management and improve their overall risk management process.
Here are some additional tips for overcoming elephant risks:
- Involve a diverse group of people in the risk management process. This will help to ensure that all potential risks are considered, regardless of who is aware of them.
- Use scenario analysis to help identify and assess elephant risks. Scenario analysis involves considering a range of possible outcomes, both positive and negative. This can help to identify risks that might otherwise be overlooked.
- Be prepared to take action to mitigate elephant risks. This may involve investing in new technologies, training employees, or developing contingency plans.
By taking these steps, organizations can improve their ability to identify, assess, and manage elephant risks. This can help to protect them from costly and disruptive events.
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