Risk #2: Operational Risk: An Overview

One of the benefits of implementing risk management in a church is that many aspects will already be familiar to congregants. For example, much like religion, risk management is open to a wide variety of ideas and interpretations, with some pushing practices and protocols forward, while others seem to just create confusion. Even simple words can have many different definitions and meanings, with each thinker arguing that they are in the right. For Christian churches, this is nothing new.

Operational risk is one of those terms that no one can seem to agree on. The size and scope of an organization's "operations" is up for debate and is unlikely to be resolved anytime soon. Fortunately, just like theological differences, not everyone had to agree on everything to still move forward. What is important here is that, though there may be some differences, the general definition of operational risk is the uncertainty surrounding, and likelihood of non-ordinary events occurring out of, an organization's internal processes and systems, its people and human resources, and external happenings.

That's one heck of a definition, so vast that almost anything could count as operational risk. For those not steeped in risk management understanding (and, really, even for those who are), defining and managing an organization's operations can be incredibly intimidating. For a church committee, it may appear nigh-impossible.

Of course, it really isn't. Using the above definition of operational risk can help open up the risks that have been hiding in the church. The first part, processes and systems, raises questions about the decision-making processes used: are they effective and efficient? could they allow for unfair manipulation? what would happen if a member of the process suddenly became unavailable? Similarly, the church's people and human resources are a key (if not the key) factor in its success. Are the staff enjoying their jobs, or do they feel stressed and worn-out? Does the church have a plan should someone decide to leave? And finally, external happenings ask congregants to consider what outside events could affect the church--this can range from weather to roadwork and construction to political legislation.

Analyzing operational risk isn't always easy, or fun, but is crucial to keeping the church running smoothly. As this blog will show in near-future, there are many large-but-accessible operational uncertainties that can be analyzed and improved upon. Even just a few quick changes can put a church on the right path, away from unnecessary risk and towards better, more-efficient operations.