Risk Management Fail: Mixing Causes with the Risk Itself

One of the most frequent mistakes I see in risk management, and not only among those just starting out, is the tendency to mix up the risk itself with its potential cause or mitigation. While it may seem like a minor issue, this mistake can significantly impact how risks are understood and managed.

The Problem: Mixing Causes with Risks

A risk statement should focus on the threat and its potential impact, not on specific causes or existing mitigations. However, it’s easy to unintentionally frame the risk in terms of one possible cause.

For example, consider this risk statement:

“Unauthorized access to the customer database due to weak password policies could result in data theft and financial loss.”

At first glance, it might seem fine. It clearly describes a threat and potential consequences. However, there is a problem: the statement attributes the risk specifically to weak password policies.

By doing so, the statement narrows down the cause before conducting a thorough analysis.

This can lead to:

• Incomplete Risk Identification: The focus on one factor (weak password policies) might cause other potential causes (like lack of multi-factor authentication or poor access management) to be overlooked.
• Inefficient Mitigation: Efforts might concentrate solely on improving password policies while other vulnerabilities remain unaddressed.

A Better Way to Frame the Risk

To avoid this pitfall, the risk statement should focus on the threat and impact, leaving the analysis of causes to a separate phase.

A more precise version of the previous example would be:

“Unauthorized access to the customer database, potentially resulting in data theft and financial loss.”

This version:

• Keeps the focus on the threat: The core issue here is unauthorized access.
• Allows for comprehensive analysis: The causes (including weak password policies) can be explored separately, alongside other contributing factors.
• Remains adaptable: The statement does not assume a specific root cause, allowing flexibility in the risk assessment process.

Another Common Mistake: Focusing on a Single Failure Point

Here’s another example of a poorly framed risk statement:

“Data loss due to improper data backups could result in operational disruption.”

Again, the statement mixes the risk itself (data loss) with a single cause (improper backups). This is problematic because:

• Data loss can happen for various reasons—hardware failures, cyberattacks, accidental deletion, or even environmental disasters.
• If the focus remains only on backups, other crucial areas might be neglected.

A clearer, more flexible risk statement would be:

“Data loss, potentially resulting in operational disruption.”

This Matters

Good risk management relies on clear, accurate, and comprehensive risk statements. When you define risks based on their threat and impact—rather than on assumed causes—you create space for a more nuanced and thorough analysis.

When you encounter a risk statement that seems overly specific, take a step back and consider whether it is focusing on the threat or prematurely jumping to conclusions about the cause. This small but essential shift in approach can significantly improve the quality and effectiveness of your risk management efforts.