Introduction to Risk Management at 2015 SQA Client Conference

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August 25, 2015

While the concept of risk has always been included in ISO 9001, the standard is shifting to a more sustainable business practice with risk management serving as the foundation. Risk is defined as the uncertainty of achieving such objects – or in business terms – the possibility of events or activities impeding the achievement of an organization’s strategic and operational objectives. The new standard embraces the concept of positive uncertainty and identifies opportunity as exceeding expectations and going beyond stated objectives.

Cindy Gholston, founder and president of CVG Strategy, LLC and her husband, Kevin Gholston, vice president of business development, delivered an “Introduction to Risk Management” at the 2015 Smithers Quality Assessments (SQA) client conference. “We all deal with risk every day in our normal activities,” said Kevin Gholston. “ISO 9001:2015 requires a process for how a company will address risk.”

ISO 9001:2015 takes a risk-based approach to the planning and implementation of an organization’s quality management system (QMS), resulting in an appropriate and affordable level of quality. The new standard requires organizations to take actions to address risks and opportunities, integrate and implement the actions into its quality management system processes and evaluate the effectiveness of the actions.

Several tools exist for organizations to identify risks and opportunities, and although it’s not required, a risk registry may be an effective way to demonstrate that all risks have been considered. In a risk registry, scores are applied to each component of risk and the organization must assess both the consequence (impact) and likelihood (probability) of the risk occurring. The scores can then be used to determine comparative risk factors to aid decision-making.

The Gholstons used an interactive game during their education session, to bring the concept of a risk registry to life. In the “game of risk,” attendees were asked to rate the risk of a scenario presented on a risk and opportunity register. The object of the game was to gain new employees and the attendee with the most employees won. “Attendees found the simulation a valuable and wild experience,” said Kevin Gholston.

Similar to the other revisions in ISO 9001:2015, the implementation of risk-based thinking was developed to help organizations navigate a complex and evolving marketplace. Organizations that adopt risk-based thinking can rely on improved customer confidence and satisfaction, consistency of quality of goods and services and a proactive organizational culture.

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CVG Strategy offers consulting and training services for ITAR & Export Compliance, Quality and Product Qualification services and is based in Viera, Florida.