What is Risk Identification?
As the name suggests, risk identification is the act of identifying negative and positive risks that impact an objective. For example, suppose you are planning a holiday in the Bahamas. After spending several thousand dollars, you've bought the tickets and booked your rooms in a luxury resort. A couple days before taking the flight, a hurricane hit the Bahamas and all resorts are closed. Your holiday is cancelled and now you're looking for refunds and an alternative holiday location. This situation could have been avoided if you knew when hurricane season was. So, in this case:
Risk Identified: Hurricanes
Not identifying risks can have drastic, costly, and even deadly consequences. Here is another example that illustrates the severity of not taking risk identification seriously.
1Recently, there was an oil spill in the gulf of Mexico, off the coast of Louisiana. The company responsible was British Petroleum (BP). One of the reasons why the spill happened was because of a casing. From several casing options, BP chose to use a riskier casing, probably for financial reasons. In the long-term and as we all know now, the cost savings by using this casing weren't justified. BP lost billions of dollars trying to stop the spill and paying for other damages, such as environment and local fishermen losses.
RIsk Identified: Oil Spill Due to Casing
Although there is no way you can identify all the risks impacting a project, brainstorming techniques may help you to identify the most important.