Risk Bow Tie Exercise
Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.
Rancho Mesa’s non-profit clients successfully serve their communities in changing economic and political climates. In part, their success is due to managing risk for an organization’s employees, clients, finances, and mission. Just as important, but less discussed than risk management, is risk analysis. This article offers one helpful tool non-profit leaders can use to facilitate risk analysis, the Risk Bow Tie Exercise.
Introduced to Rancho Mesa by the Nonprofit Risk Management Center’s book World-Class Risk Management for Nonprofits, the Risk Bow Tie technique helps nonprofit leaders consider an event’s positive and negative consequences in a group setting. Following the exercise, participants may feel empowered to utilize the technique in multiple departments to analyze both expected and unexpected events.
The five steps of the bow tie exercise include:
Identify a potential event.
Identify some of the underlying conditions that make the event more or less likely, more or less impactful, and more or less urgent.
Identify some of the consequences or ripple effects, both positive and negative, should the risk materialize.
Identify preventative risk management steps or controls that could make the event less likely or less detrimental.
Identify risk management steps or controls that could be planned now, but implemented after the event has occurred, to reduce the potential negative consequences.
The image below, from page 152 of World-Class Risk Management for Nonprofits, is a sample Bow Tie Worksheet.
Risk Bow Ties Worksheet image provided by World-Class Risk Management for Nonprofits.
Performing the exercise in a workshop or group setting will usually provide one or more of the following insights:
The group uncovers details of an event that had not previously been discussed or observed.
Both positive and negative consequences can result from one event.
The exercise brings to light unique perspectives and experiences from multiple participants.
Identifying important underlying conditions and consequences better informs the creation of relevant controls.
Team members can perform a risk analysis in a fun, accessible and informal way.
Nonprofit leaders can use a diverse set of tools to analyze and manage risk. Rancho Mesa encourages clients to ask about various tools we have available to prepare for both the expected and unexpected.
To learn more about the Risk Bow Tie technique contact me at sbrown@ranchomesa.com or (619) 937-0175.