Transcript

SPEAKER

So a very useful tool that risk managers use in order to articulate risk in a very visual way is a risk bowtie. And fact you've got a risk bowtie is is it has in the very middle of it where the knot of the bowtie is is a risk event that your company is trying to manage. And if the risk event becomes an issue, it could pretty much derail your organisation, your small business, whatever it is you're trying to achieve. And what happens is you put on the on one side, you put all the causes of that risk event, and on the other side, you put all the consequences or the impact if that risk became an actual issue and materialised.

So let's say that you are a new company, and you are setting up for the very first time your restaurant. And your chef, who's worked really hard, and one of the things that you really want to not have in your first maybe week of opening is a food poisoning scare. So you might put on the causes side what are the things that might cause food poisoning or anything that you don't want to come out of the kitchen to be served out to one of your customers.

So you start to list down all the causes of that. It might be that your waiters haven't washed their hands, or they don't understand maybe that the hygiene rules. It might be around washing plates carefully and making sure you don't mix up the old plates with the new plates and then the impact of that. So what are the consequences if something goes wrong, and how would you deal with it?

Then with the risk bowtie, you can start to think about, what are the controls that you need to put in place in order to manage those causes and also minimise the impacts. And often, time can be running quite close. So you might be thinking right if perhaps a critique came in and didn't have a good experience, how would I make sure that I've limited the impact on the business going forwards?

So that's the principle behind a risk bowtie method. And many organisations use it in order to kind of capture what are the really- what's the worst thing that could happen to the organisation? And how can I make sure that I'm really managing and understand what are the causes of that risk? And then also thinking very carefully about what the impacts would be if that risk then actually materialised.