RiskChoices

 
 
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 Risk is an uncertain event that, if it occurs, will have a positive or negative effect on your objectives. We have focused our attention to the adverse effects of risk, but we can use the same approach that we do adverse risk management for capitalizing on opportunities.

RiskChoices helps you identify, measure and respond to risks that are not easily measured and managed using other approaches.

Risk management is the process of identifying, measuring, and managing these uncertain events. Risk management can be approached in two distinct ways: by using numbers (quantitative) or by using words (qualitative). The “numbers” method of measuring and managing risk is both common and well understood in our industry. Financial statements, with their benchmarks and ratios, are one example; CropChoice$ Version 4.10 software is another. Futures market activities, such as hedging, also provide this type of quantitative approach to dealing with price risk.

However, when you don’t have numbers, or when risks don’t lend themselves to a quantitative approach, a new easy-to-use risk matrix tool called RiskChoices can help you identify, measure, and manage risk by using “words.” RiskChoices consists of an instruction folder, and a series of worksheets and charts that guide you through its various steps.

While this type of process (using words) is new to most agri-businesses it is used extensively in larger scale businesses and project management applications. It is also as part of a larger risk management programs in Enterprise Risk Management.

In summary, the strengths of the RiskChoices approach are several:

  • It’s very adaptable, and can be used whenever you need to identify, measure and manage risk
  • It uses words and ideas instead of numbers, math and statistics
  • It simplifies risks by separating each one into two components: probability and impact
  • It generates meaningful and structured discussion about managing risk and, at the same time, provides a simple but organized method of keeping track of the strategies created
  • It gets risks out on the table where the whole management team can see them and deal with them in an organized manner

For more information about using RiskChoices, click here for Risk Choices – Strategies & Tips or here for a completed RiskChoices example or for a downloadable version click here. If you prefer a printed copy with extra worksheets, please contact Dean Dyck at 310-FARM.
 
 
 
 
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For more information about the content of this document, contact Dean Dyck.
This document is maintained by Nicole Halvorson.
This information published to the web on January 20, 2009.
Last Reviewed/Revised on July 28, 2016.