FireRisk Management has been gaining in importance in PR discussions, and that’s a good thing – understanding the issues surrounding any risk management-related issue will help any communications professional be better at their job should they be required to intervene. (Disclaimer : I may be a risk management enthousiast, but by no means a pro. The following is a very basic, layman’s guide to the logic of it all. If this floats your boat, speak to the pros, find a course and get your “learn on”!)

Here are the 4 basic components of Threat / Risk Analysis:

  1. The Risk
  2. The Threat
  3. The Probability
  4. The Impact

Lets break it down, using the example of fire extiguishers in an office building.

The Risk : There could be a fire in the office. This could be a small fire (like an outdoor ashtray catching fire), an medium blaze (the projector in the conference room caught on fire) or an inferno (the whole floor is catching fire). You get the idea; fire.

The Threat : Should there be a fire, local or general, employees’ safety, even lives could be at stake. If the information systems are not properly set up, important data loss could also occur.

The Probability : here’s the deal. There are virtually no deaths EVER recorded that are directly attributable to the absence of a fire extiguisher in an office building. Have you ever heard of one? Didn’t think so.* This means that logically, your fire extinguishers are taking up ressources, yet the chance of them ever being needed is pratically inexistant. Mathematically speaking, it would make better business sense to just get rid of them, you’ll save time, money, resources and even space. Logically. There is virtually no probability of this threat ever materializing.

The Impact : Say you do have a fire in your office building, and that you, logically, removed the extinguishers. Then, something really bad happens, that could have been prevented had an extinguisher been available… you see where this is going? The potential impact plays heavily into the mix, regardless of probability. The impact of people dying because you removed the extinguishers, though a mathematically logical move, would be too much to bear. Given the possible severity of the outcome, probability no longer matters.

This is really an overview of the basic logic behind risk management (RM), for a real ride just find a real Risk Management consultant and start asking about their craft, these guys are awesome! A good place to find them is to look at the consultancies, like KPMG, Deloitte, Ernst & Young, etc.

In a corporate or social environment, RM can be used for everything from corporate governance, IT security, HR policies to, well, fire extinguishers and physical safety issues. There are almost no limits to its applicability.

The involvement of an organization’s communications people int o risk management makes a lot of sense, to say the least. This basic analysis and its 4 elements can also be applied to pre-emptive crisis management for PR issues – at least to help prioritize.

Special request for Public Relations professionals : Let’s all make sure that we do not misuse or abuse the term Risk Management, like all those folks who throw the words “crisis” and “crisis management” around so gratuitously. You know who I’m talking about. Thanks!

*Anecdotal statistic