Small risks can become big ones and cause problems

What investment could you make now to save a hole forming in the budget in future years? Helen Simmons, finance director at the Diocese of London, poses the question

Helen Simmons
Helen Simmons

Slowly but surely, bits of my house stop working properly. The dripping outside tap has become a continuous trickle that I hear in the pipes each morning, the wardrobe door falls off, the fridge defrosts itself at random, illogical intervals and the doorbell hasn't managed a ding-dong for two years.

In the scheme of a busy life, these dysfunctional aspects get neglected because of higher priorities, such as getting the boiler working. But there comes a point when the cumulative effect of 10 lower-priority issues nagging at you is equivalent to a higher priority item. More worryingly, they also, if neglected, begin to link up with new issues and become a group priority. But there is no quick fix, because each smaller priority requires the application of a different skillset in order to be resolved.

I recently overhauled our risk register. This involved re-scoring it with impact weighting (impact score times likelihood score plus impact score again), deleting the out-of-date, adding the new and the frighteningly absent and merging the garbled ones that were all saying the same thing.

The one step that I ran out of time for was looking for linkages across the piste. There are risks that, on their own, seem manageable and limited. But when an incident occurs, linkages across the register create a snowball effect that can damage the organisation in a big way. Keeping this in mind, I'll have to re-assess the exercise over the next year, because my mind will not rest easy until I do.

Just as the faulty tap risks dampening the brickwork and damages my sanity, the defrosting fridge might cause salmonella in the leftover egg fried rice and the broken doorbell prevents me taking up the offer of manure for the garden, so the risk register correlations need to be mapped.

The next task will be to group the issues by the skills needed to reduce their likelihood. Half of my household problems can be solved by a good plumber and - if I assess the problems effectively and communicate them well - consolidated into one call-out charge.

What actions might simultaneously reduce the residual risk of a whole number of risks in the organisational register? What investment could you make now to save a hole forming in the budget in future years?

Helen Simmons is finance director at the Diocese of London

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