Managing Operational Risk and Uncertainty
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On this episode of\\xa0Scale with Sergio, host\\xa0Sergio Reyes\\xa0was joined by\\xa0Dr. Tyson Browning,\\xa0TCU\\xa0professor of operations management.
The duo dove into a topic that\\u2019s been thrust into the spotlight in light of the spread of the novel coronavirus and the ensuing\\xa0COVID-19\\xa0pandemic \\u2013 how to best manage operational risk and uncertainty.
How well organizations were prepared for the unknown \\u2013 or not prepared at all \\u2013 has been revealed by the current period of uncertainty. But how, even if an organization came up short in this instance, can they prepare for the unknown that lies ahead?
First, the pair said, it\\u2019s key to outline some key distinctions.
\\u201cIt\\u2019s important to distinguish uncertainty, which is all the stuff out there in the future that we don\\u2019t know exactly how it\\u2019s going to turn out \\u2026 (from) risk and opportunity. There are a lot of uncertainties, but only some of them could have a negative impact, potentially, on our operation, supply chain, or project,\\u201d Browning said.
\\u201cWe call these threatening, negative potential outcomes risks.\\u201d
While uncertainty and risk are certainly words that come with highly negative connotations, there are ways to navigate them.
\\u201cOverall, I like to use the kind of classical, standard five-step process for managing risk and opportunity,\\u201d Browning said. \\u201cIt\\u2019s very general, and people use it more or less in many cases. It\\u2019s a good starting point.\\u201d
Those five steps are identifying risks and opportunities, assessing them, prioritizing them, responding to them, and continuing to monitor them.
To get a more in-depth idea of what goes into each step, listen to the entire episode.
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