To achieve comprehensive and effective risk management, it is essential to begin by distinguishing basic concepts such as risk, problem, and incident—key elements for taking a preventive approach.
See below:
Risk – According to the dictionary, it is the probability that an uncertain and undesirable event may occur.
Incident – An event that has already occurred and has caused an immediate disruption or resulted in a reduction in the quality of a service.
Problem – The root cause underlying an incident.
Why Do You Need to Understand This?
The answer to this question is simple: because it is essential for risk management and crisis management within your organization.
Understanding that these concepts operate together within a continuous improvement cycle of risk management ensures better resource optimization and helps prevent operational failures. When they are treated in isolation, it is common for improvised solutions to be applied merely to contain an incident, rather than addressing its root cause in order to prevent recurrence and ongoing losses.
Risk, in addition to representing uncertainty, is a potential threat. An incident is the effect, while the problem is the root cause that generated the incident and was likely previously identified as a risk.
Direct Relationship with Risk Management
Risk management aims to continuously identify, analyze, evaluate, and control threats and opportunities that may impact a business or a specific project.
Once risks are mapped, it is essential to focus on the problem (or root cause) to ensure that the risk does not evolve into an incident.
In addition, preventive actions and contingency plans must be designed so that, if an incident does occur, it does not result in operational downtime or a reduction in the quality of deliverables.
Knowing the risks without addressing the problems that increase the likelihood of them becoming incidents is like waiting for a train to catch up with you on the tracks.
However, not all risks can be avoided, and when they become incidents, they must be properly analyzed and documented as lessons learned, facilitating the identification and understanding of the underlying problem.
Let us consider a practical, real-world example: when developing a risk matrix for a restaurant, we identify the possibility of gas pipeline leaks. This threat has a high likelihood of becoming reality because the gas piping is very old.
If the leak has already occurred, it would reveal what failed; however, simply repairing the damaged pipe would not be sufficient. After all, the problem is much broader and explains the cause of the leak, which is the lack of maintenance or the fact that the pipes are outdated. In this case, a full replacement would be necessary to prevent future incidents.
Analyzing incidents and addressing problems contributes to a proactive risk management strategy, directly impacting the prevention of recurrence, reduction of operational costs, continuous improvement and strategic evolution, mitigation of severe losses, among other benefits.
Streamline Your Risk Management with Interact Risk
With Interact Risk, the comprehensive risk management solution within the Interact Suite, working with these concepts in an integrated way—and understanding their impact on management strategy—becomes much easier.
As we can see, in theory, risk, incident, and problem are clearly connected. However, in the day-to-day operations of organizations, this relationship is often lost due to a lack of integration between information, departments, and processes.
By centralizing risk management on a single platform such as the Interact Suite, organizations can map risks, define controls, record incidents, and track action plans in an integrated manner, effectively connecting these three concepts in practice.
The solution’s functionalities also enable the identification, analysis, and auditing of control practices, with the goal of preventing the materialization of strategic, process, project, financial, environmental, legal, and other types of risks.
Even when an incident does occur, Interact Risk provides tools to ensure that the event is recorded, analyzed, and linked to a corresponding risk, ensuring greater traceability and control, while generating valuable insights for future risk management cycles.
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After all, without integration, risks, incidents, and problems are merely isolated records. When integrated through the Interact Suite, they become powerful information assets within an intelligent cycle capable of guiding more accurate decisions and enabling a proactive strategy.
