Let's imagine that we have an asset.
It could be a plane, a building, a drilling rig, an IT system, a manufacturing system, a ship, a vehicle …whatever.
The asset adds value to our company, and for that reason, we want to protect it.
From time to time, we need to make changes to the asset.
We perform preventive maintenance to counteract the wear and degrade,
corrective actions to repair it when it breaks, and enhancements to make it better or faster.
However, any change of an asset constitutes the chance of something going wrong and thereby of suffering loss.
This uncertainty is known as risk.
The chance of something going wrong is the likelihood, while suffering loss is the consequence.
The higher the likelihood and consequence, the higher the risk.
That means that we can lower the risk by reducing the likelihood.
Actions aimed at reducing the likelihood are called preventive actions.
We can also lower the risk by reducing the consequence. Such actions are known as contingent actions.
But, how do we effectively assess risk in our daily work?
We do that by asking a few basic questions before we start on a task.
Is the task you are going to perform unfamiliar?
Did it previously go wrong?
These two questions aim to clarify the likelihood.
Two times no indicates that the likelihood of something going wrong is low, while one or two times yes indicates, that the likelihood is relatively high.
The third and final question aims to clarify the consequence.
If the task goes wrong, can it then compromise the safety, damage reputation, cause financial loss, or a waste of labor?
If the answer is no, then it indicates that the consequence is low, while yes indicates that it is relatively high.
The risk is low if you answer no to all three questions,
which means that there is no need for risk treatment and we can just perform the task.
However, if one or more of your answers are yes, then you are dealing with significant or high risk.
In such a case, you should initiate risk treatment to reduce the risk before you start on the task.
That was a lot of terms and definitions, but don't worry. You will learn it by doing it.