Taking risks is a key component to business growth. Whether it’s new products and markets, investment strategies, or acquiring companies, enterprises must take some risks to maintain and grow their profitability. However, not all risks are equal and some are better than others. Oftentimes, the riskier an enterprise’s activities are, the greater their potential rewards.

In order to make better decisions, businesses need a clear understanding of the risks associated with their projects and programs. This requires risk identification, where risks are identified and assessed through a number of different methods. For example, a risk assessment matrix may be used to rank risks by their likelihood of occurring, impact of the outcome if they do occur, and velocity (how quickly the impact would be felt).

Once risks are identified, they must then be prioritized to determine which ones should be addressed first. Prioritizing can be done by ranking them in a risk matrix or similar tool or by assigning a risk owner to oversee each one of them.

After a risk is assigned to an owner, the owner must stay updated on the status of that specific risk. This can be accomplished through a variety of means such as face-to-face meetings or via dedicated communication channels in a project management software tool. However, it is important to remember that this process is not static and must be adapted as necessary due to changes in leadership, technology, policies, regulations, market forces, etc.