Risk management is one of those specialized business practices that can make anyone feel like an idiot. Which is to say, you’re not an idiot. You can’t possibly be: you picked up this book and are willing to take a brand-new approach to managing your business!

Risk management takes you through a parallel world of threats, risks, and processes. You may have been in business for 5 years, or 10, or 20. Maybe you are just starting a business. Perhaps you’re a manager or employee of a company.

Whatever the case, this journey differs from any you have taken before. It will teach you things about your business and industry that you never knew.

I have worked at all levels of business with all forms of risk management. I have helped small businesses troubleshoot their systems and operations and build simple solutions that reduce or eliminate their risk. I have helped some of our nation’s biggest financial institutions—Citigroup, the Federal Reserve—and the governments of other nations work out far more complex risk problems.

I love the challenge of identifying a risk, figuring out what to do about it, building the right measure or model, analyzing it, and resolving the problem. I hope you’ll take up the challenge and find it both important and exciting. This book is yours to help you uncover what might ail your business—and then to make your business better.

Let’s start our journey.

Risk management breaks down into simple steps and processes, all of which you can use in your business.

Part 1, “What Is Risk Management?,” introduces the core concepts of risk management. It also helps you develop the rationale for developing risk management capabilities in your business, as well as some of the basics to help you get started.

Part 2, “What Causes Risk?,”sets you up with the basic language of risk and allows you to start referring to your risks in the same way as risk professionals.

Part 3, “Assessing Risk,”provides you with the core tools and techniques for measuring and assessing the risks that you have identified.

Part 4, “Managing and Mitigating Risk,”establishes the range of methods used for managing and mitigating risk—and how to deploy these methods in your business.

Part 5, “Deep Dive: Focused Solutions,”provides you with a close-up view of each key risk type and the core methods for measuring and managing each of those risks. You’ll also receive helpful hints to avoid the classic pitfalls.

Part 6, “Integration,”helps you build risk management into your day-to-day operations and develop a seamless operating environment. You’ll also discover ways to make real money out of risk—not just prevent and manage it.

If nothing else, risk management is about information and awareness. I have a ton of information to share with you, so much that I’ve spiced up each chapter with some extras, which you’ll find under these headings:

Above all, I’d like to thank my loving and patient husband who surprisingly still speaks to me. I’d also like to thank my daughter, Alex, for just being there for Mommy. Your sweet smiles and sense of humor get me through all of this. To the rest of my family, who pitched in to help when it was needed. To Cassie, for being my prototype and listening at every turn. To Kay, who gave me the impetus to do this project. You’re still my best student! To my brother, Joe, who thinks I’m the biggest idiot of the lot—only a brother’s prerogative. To Bob, the unsung hero. You are the one who made this possible. Finally, to all of my friends, colleagues, and clients through the years, who have helped teach me what I know today.

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