Can you hear it? That buzzing sound!
The buzz I’ve been hearing is about ISO 31000, the new Risk Management Standard from the International Standards Organization. Then again, my wife continues to remind me that I’m hard of hearing.
Search for the phrase “risk assessment” with Google and you’ll get over 11.5 million hits. And if you’re a risk manager trying to choose a risk methodology, you have many to pick from (this is not a complete list):
With all of these risk assessment methodologies available, why was it such a big deal when ISO introduced a new standard earlier this year? ISO 31000 was adapted from the very successful and widely accepted AS/NZS 4360 Standard, but it has been refined and consolidated making ISO 31000 even more effective than the existing AS/NZS standard.
The new standard has been widely praised by industry analysts and experts:
One of the big draws for Arnold H. Schanfield is that it’s short and to the point. ISO 31000 is only 34 pages long, as compared to COSO ERM which has over 125 pages and 116 pages for AS/NZS 4360.
One of the things Michael Rasmussen likes is the simple but effective risk definition “effect of uncertainty on objectives.”
Dan Markiewicz writes that people are excited because it “brings together a global consensus on risk management.” That includes all forms of risk management, such as financial, security, safety, health and environment.
After reading numerous articles on this topic, the common thread that authors seem to agree on is that ISO 31000 is simple and adaptable. From what I’ve read, it’s possible that ISO 31000 will be the risk management framework that harmonizes risk management processes in existing and future standards.
Michael Rasmussen summarizes that point very well:
“ISO 31000 provides a risk management approach that can be used across the silos/domains of risk scattered across the organization. It is just as relevant to areas such as legal risk management as it is to information security, quality, or environmental, health & safety.”
This reminds me of a famous quote by Albert Einstein:
“Any fool can make things bigger, more complex… It takes a touch of genius – and a lot of courage to move in the opposite direction.”
What do you think about the new ISO 31000 standard? Will you be considering it for your organization? Feel free to share your reactions in comments to this post.