What is the first step in risk management?

The first step in risk management is to identify and assess risks. This step involves recognizing potential risks that could impact a project or organization and evaluating their possible effects. By identifying risks early on, teams can gain a comprehensive understanding of what threats exist, along with assessing their likelihood and potential impact. This foundational step is essential because it informs all subsequent actions in the risk management process, including prioritizing risks, creating mitigation strategies, and monitoring risk exposure. Without a clear identification and assessment of risks, any efforts to mitigate or manage those risks may be misguided or insufficient. Therefore, this initial step sets the stage for effective risk management and helps ensure that resources are appropriately allocated to address the most significant threats.