I believe it was Chaucer, in his masterpiece The Canterbury Tales, who wrote this classic line:
'To manage risk, one must first know what it is.'
Ok, I made up the whole Chaucer part. Still, it is pretty hard for businesses to master the art and science of risk management without first defining risk itself.
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So what is risk? Well, Here is a nice compact definition that I like:
Risk equals the inherent chance of a bad result from a decision or course of action.
Not wordy enough for you? No worries. Here is a bit more expansive definition of risk:
Risk is a foreseeable possibility that an uncertain future will produce an unexpected negative outcome. The more risk a given action carries, the greater the chance for bad results and/or increased negative consequences.
I like the first definition better simply because it is short and to the point. If you have a good definition for risk, feel free to comment below...
By Brett Sherman; The Sherman Law Firm
