This chapter is from the book
This chapter is from the book
This chapter is from the book
Risk Transitions and Transition Indicators
Imagine the moment when something that used to be a risk suddenly becomes a problem. It used to be an abstraction, a mere possibility, and now it is not abstract at all. It has happened. This is the point at which the risk is said to materialize. It is the moment of risk transition.
Transition is a key concept for the risk manager—it is the triggering event for whatever is planned to deal with the risk. Well, almost. The actual transition may be invisible to you (for example, Saddam Hussein decides to invade Kuwait). What you do see is a transition indicator (the massing of troops at the border). For every risk you need to manage, there is some kind of transition indicator. Some indicators are more useful than others, though. More about that in a moment.