Five Layers of Risk

Michael Herrera

The impact of a risk varies according to what happens to who and when. When considering risks, it can be extremely helpful to separate them into broad categories (layers) in order to properly prioritize their solutions. When evaluating risk, we can see five distinct layers which range from what affects everyone (including customers) all the way to the processes performed by each individual.

Layer 1: Concerns external risks that can close a business both directly and indirectly (i.e. flooding, hurricanes, etc.). This type of risk usually disrupts customers, suppliers, and employees.

Layer 2: Examines risks to the local facility involving everything at the site. This can include how offices were constructed, hazardous material spills, electrical power, etc.

Layer 3: Deals solely with data systems organization. Operational issues and legal issues can arise from loss of data and can put an organization in a world of hurt.

Layer 4: Deals with the individual departments and is a main driver of a plan. This layer involves the periodic crises confronting functions to perform, production goals and weekly assignments –  and the specific tools needed to do so.

Layer 5: Personal desk or work area. This is the level that affects an individual. If you can’t do your job in a timely manner, it may not stop the company from shipping and selling products but it can add unnecessary stress.

About
Michael Herrera is the Chief Executive Officer (CEO) of MHA. In his role, Michael provides global leadership to the entire set of industry practices and horizontal capabilities within MHA. Under his leadership, MHA has become a leading provider of Business Continuity and Disaster Recovery services to organizations on a global level. He is also the founder of BCMMETRICS, a leading cloud based tool designed to assess business continuity compliance and residual risk. Michael is a well-known and sought after speaker on Business Continuity issues at local and national contingency planner chapter meetings and conferences. Prior to founding MHA, he was a Regional VP for Bank of America, where he was responsible for Business Continuity across the southwest region.