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What is Risk-based Thinking?

Editorial Team May 30, 2018 0
What is Risk-based Thinking?

One of the main alterations in the revised 2015 version of ISO 9001 standards is the introduction of systematic and structured processed when it comes to risk assessment. This also included refraining from treating preventative measures as separate from QMS or quality management systems.

Risks are present in all aspect of these systems from the processes involved to their functions. Risk-based thinking can help business owners determine that those risks are highlighted and taken care of in a controlled environment. In past ISO 9001 versions, preventative measures such as this were treated separately but with this approach, risk based thinking has become a central part of quality management systems.

Risks are present in all aspect of these systems from the processes involved to their functions. Risk-based thinking can help business owners determine that those risks are highlighted and taken care of in a controlled environment. Click To Tweet

In other words, systems are being designed to be more proactive rather than reactive so that they can detect and take care of anomalies before they get the chance to do some serious damage. This is possible if it is in-built into a risk based QMS early.

In the basic standard ISO 9001 requirements, risk can manifest in the following areas:

In Leadership

The management should be trained to take care of risks as they appear and look out for opportunities for improvement.

In the context of the organization

According to ISO standards, when organizational context is being prepared, companies should determine risks as well as goals. This also includes determining which products are nonconforming.

In Planning

Besides determining opportunities and risks, this section also addresses plans that can address both.

During operations

Actions that have been determined during the planning stage need to be controlled and implemented in this stage.

During performance evaluation

In this stage, companies should track and examine opportunities and risks involved in the business.

In improvements

If the risks change, companies should take appropriate steps to make improvements where needed as soon as possible.

Importance of risk based thinking

Risk based thinking can help organizations determining the steps and processes they need to implement to acquire company goals and improve on them. It can also improve productivity and make customers confident that they can expect the level of service they need. It can also:

  • Ensure a proactive approach when it comes to making improvements
  • Ensure that quality remains consistent of all services and products
  • Aid with regulatory compliance and regulations
  • Maintain a culture of improvement throughout the organization
  • Improve customer satisfaction and confidence

Signs of a poor risk management system

There are a few common signs that point to a poor risk management system. These include:

Ambiguity – In order to understand risks, organizations need to come up with questions that can help them interpret them. Uncertainty about these can lead to overlooked opportunities.

Complexity – There is such a thing as too much information. Without filtering the data they need to determine risks, decision makers cannot understand them.

Uncertainty – organizations have trouble collection appropriate information about the risks they face and do not conduct checks or do infrequent checks.

Power struggles – There are disagreements between individuals who have conflicting views and beliefs about risk assessment and management. This can happen if there are multiple interpretations of the risks involved.

Silo-based thinking – this is common in large organizations which is made of multiple business units and who resist communication regarding risks.

Difference between risk-based thinking and risk management

There is a reason why risk based thinking is not the same as risk management. Some experts are of the opinion that the former is a weaker version of management since the new ISO 9001:2015 does not require assessments or the maintenance of a Register.

However, nothing can be further from the truth. The new standards highlight the importance of implementing risk into the decision making process without the need for formal processes. This gives organizations more flexibility when it comes to fulfilling standard quality control requirements and acquire the certification they need.

ISO 9001:2015 Introduction

With 360training.com, you can now get a certified ISO 9001:2015 Introduction course that’s designed to help students understand the effectiveness and need for better communication and quality awareness in organizations. This also includes an introduction to ISO 9001:2015 and the revisions that make it unique. Sign up for the course today and ensure your quality management systems help you meet business goals without compromising productivity.

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