Six ways a sophisticated risk management methodology can help you:

1. Identifying key risks so you can focus your limited resources on the risks that matter most.
Often, it's the combination of several factors that makes risks stand out. To use a highway example, going over the speed limit is one indicator of risk. But a lot of drivers go over the speed limit and have good driving records. If you know that the driver is going over the speed limit, and weaving in and out of traffic, and failing to signal, and driving an unsafe car, the risk is much clearer.

2. Comparing and differentiating risks, explaining how situations that look similar can be very different.
To illustrate with a medical example, consider three nurses who breached the same standard but in different situations. In each case, complainants accused them of "failing to provide care."
Nurse #1 wasn't able to provide care because of understaffing. She was attending to other patients who had more urgent needs.
Nurse #2 works in a Long Term Care facility. He didn't provide care because the patient was "difficult." He made it clear that he didn't "like this person."
Nurse #3 has a bad attitude. She didn't provide care to a critical care patient because of an argument with co-workers.
If we used a risk assessment tool to score the risks for these three situations, it would reveal some key differences. If 100 per cent represents the potential of death arising from a nurse's actions, Nurse #3 is probably at about 95 per cent, Nurse #2 is at 55 per cent, and Nurse # 1 is at 10 per cent.

3. Providing transparent logic to support your decisions and encourage others to support them as well.
Regulatory decisions are often burdened by too much paper. An impressive amount of paper doesn't make the logic supporting the decision any clearer for the panel that has to review it.
However, a risk framework clarifies for all parties how decisions are going to be made. It allows the logic supporting the decision to be explained clearly. The decision is transparent.

4. Adding a sharp focus to what you are doing, supporting effective strategies for dealing with challenging situations.
Regulators, like referees in a game, administer rules. Good referees understand the history of the players and their coaches, what's at stake, and the likelihood of unacceptable behavior. If the referees expect trouble, they'll determine a strategy before the game starts. Part of that strategy may be to tell the teams that they plan to enforce rules that have previously gone un-enforced.

5. Supporting strategies for responding to the most difficult and complex threats.
These types of threats require a holistic approach that co-ordinates many stakeholders. Many of our citizens are eating food that's bad for them. It's making them sick and it's killing them. The projected costs for the health care system are staggering.
A headline in the paper reads "New York tries to unclog its arteries." (The Globe and Mail, September 28, 2006) Banning trans-fat-free oil from use in "2,600 eateries" in the Big Apple may be a starting point.
However, will this stop a diabetes epidemic and reduce demand for heart surgery? As an isolated action, not likely.
What's the holistic solution? We can learn from our success in fighting tobacco addition. Governments regulated the product, the packaging and the advertising. This was the defensive strategy. The offensive strategy sought to change public opinion using social marketing techniques. Up to this point, people were joining the smoking majority. It was a growth business for tobacco companies. In the face of strong resistance and criticism, public opinion eventually changed. This set the stage for other levels of government to further restrict smoking. The coordinated efforts of many stakeholders in the anti-tobacco camp made a difference. Difficult problems need holistic solutions that come from the collaboration of partners.

6. Helping you make faster and better decisions.
Good decisions are 90 per cent having the right information and 10 per cent judgment. An effective risk management methodology gets you focused. What decisions do you need to make? What information do you need to make those decisions?
Getting the right information is vital. The information you need is based on how you determine risk - and we know that risk is more obvious when we use a combination of factors to identify it.
Murphy's Law suggests that this information may not be in your database - but it should be. Applying a risk management methodology helps you determine your information management requirements.