How can “mindfulness” contribute to the way we manage risks? This is an interesting question to explore.
All of us face risks and issues in our lives, either personally or professionally.
For some, managing risks and issues forms part of their daily jobs. For example, project managers would do so on an ongoing basis for their projects.
For others, making a conscious effort to evaluate risks would be something they may not be too familiarised with.
So let us first take a look at the definition of a “risk”. Simply put, a risk is an uncertain event that has not happened yet.
If this uncertain event materialises, it could either threaten our objectives or create opportunities for us.
There will always be a certain level of uncertainty or risk when we embark on something new.
Sometimes, uncertainty can cause stress and anxiety, and it may even prevent us from achieving our goals.
In projects, for example, project teams might at times feel stressed or anxious by the risks and issues impacting their work.
So how can “mindfulness” help us in our approach to risk?
First of all, let us explore the meaning of “mindfulness”.
“Mindfulness” is our own ability to be “present” and “aware” of pretty much anything around us.
“Mindfulness” often helps us think more clearly and calmly.
We can practice “mindfulness” in many ways and in many different contexts.
For those who meditate, for instance, “mindfulness” is a type of meditation that brings you to the “present” moment and that requires you to focus on a particular object.
An example would be to become “aware” of your breath and focus your attention on your breathing. In this case, your breath would be the object of the meditation. As you close your eyes and start to relax, you bring your attention to your breathing and focus on the sensation of your breath coming in and out of your body. This simple exercise helps you both relax and enjoy a calming “present” experience.
When we focus our attention on a particular object or situation, we are already practising “mindfulness”.
When we are “mindful” about uncertainty, for example, we become “aware” of potential events that might impact us. We begin to identify such events and we acknowledge that they might happen.
Acknowledging the situation we are in, and assessing the potential risks ahead, can help us navigate through uncertainty better.
In a way, both “mindfulness” and a formal approach to managing risks can complement each other.
When we practice “mindfulness” regularly, we make a habit out of being more “focused”, more “present”, and more “connected” to the world around us.
We can practice “mindfulness'' by simply being more conscious of what we do every day, for example.
When we are “present”, we can often have a clearer picture of what is going on around us. It can help us feel less overwhelmed. And, we can be more proactive and less reactive.
This is important because managing risks effectively does require a proactive attitude.
In the context of corporate projects, for example, project teams are often mindful of potential risks that could impact the objectives of the project.
They would proactively and regularly identify, assess and control potential threats to what they are trying to achieve.
This attitude makes them less likely to be “taken by surprise” when uncertain events happen.
Being “aware” of potential threats or opportunities, could help us manage uncertainty in a less stressful and more effective manner than if we just let risks impact us totally unprepared.
This would apply not only to formal projects, but also to any change or initiative we may be taking on at a personal or professional level.
There are formal processes to manage risk that complement a “mindful” attitude towards uncertainty.
In the context of project management, for example, risks are identified, assessed, monitored, and managed on a regular basis throughout the life of a project.
In general, the first step after identifying a risk is to understand its cause. Once the cause of an uncertain event is identified, we would need to assess the probability and impact of that event materialising as well as the actions needed to manage it.
This is very important because when a risk materialises, it may cause a major impact to what we are trying to achieve.
Depending on how likely it is for a risk event to actually happen, project managers would determine whether the likelihood is “high”, “medium” or “low”.
Once we have identified the cause, likelihood and impact of a risk, we can plan what actions to take to mitigate it.
Risks may cause a threat or create an opportunity to achieve our goals.
To better explain the concept of a risk, its cause, likelihood and impact, let us see an example.
In this scenario, an entrepreneur plans to open the first sustainable clothes-swap shop in a new trendy neighbourhood. This area is becoming very popular for its sustainable coffee shops and local produce eateries.
A lot of market research is carried out and the conclusion is that it is the ideal place and time for introducing this concept to the community.
Being the first clothes-swap shop in the area would give the entrepreneur the upper hand in acquiring customers and promoting the initiative.
However, this great business idea does not come without risks, and it will require a substantial financial investment to implement.
Being “aware” of the current market environment, and “mindful” of the risks ahead would help make informed decisions on the course of action to take.
A potential risk to this initiative would be that another entrepreneur came up with the same idea and opened a clothes-swap shop first. If this were to happen, competition would likely be hard, and two clothes-swap shops in the same area would be a less viable option (risk threat).
In this example, the cause of this risk would be that someone else could open a clothes-swap shop in the same area first (risk cause). For this reason, there is a risk the entrepreneur may not be able to successfully compete (risk event), and if this happens, the original business idea might be less viable (risk impact).
Sustainability and clothes swapping themes are becoming very popular, so the likelihood of someone else coming up with the same idea would be relatively high (risk probability).
As a mitigation action, the entrepreneur may target to open the shop as early as possible to hopefully avoid the risk of not being the first one in the area (risk mitigation).
Another option would be to accept this risk and turn it into an opportunity. If this event were to happen, the entrepreneur would be able to test the competitor’s business and learn how to differentiate from them to attract more customers and become more successful (risk opportunity).
Once “aware” of the threats and opportunities, the entrepreneur would be able to make informed decisions about how much risk to willingly take and what to do about it.
Being “mindful” about uncertainty would likely help you identify risks and come up with a plan of action to mitigate any impact to your objectives.
Practising “mindfulness” as part of your life would probably contribute to a more relaxed and clearer mind. This could also help decrease levels of stress and anxiety, and prepare better for risky scenarios.
Ultimately, following a process to manage any threats to your goals together with a “mindful” approach to risk would likely improve your chances to succeed through uncertainty.
Would you like to learn more about risk management? Contact us to join one of our workshops!