Risk management is the process of identifying, prioritizing, and minimizing the risks faced by an organization. While specific areas of concern for risk analysis vary widely between different sectors, risk can be broadly defined as sources of uncertainty with the potential to negatively impact the organization’s objectives. By definition, reducing the likelihood of bad outcomes for a business is important to its ongoing success - and in some cases, critically so.

Project management as an example of an area where risk management is both wide-ranging in responsibilities and centrally important. Whether the project in question is building a skyscraper, a power plant, or a subway system, project managers must look at risks that can occur at any point throughout development cycles that can span months or even years. With potential risks including accidents on site, natural disasters, pricing changes in supplies, subcontractor performance, changes in regulatory requirements, and countless others, the task of not only identifying but prioritizing their importance a considerable challenge - let alone minimizing them all.

Risk management is also of central importance in investing. Financial risk is the risk of losing money on a transaction, and modern portfolio theory has developed techniques for assembling a group of investments that minimize the total Value At Risk (VAR) for a targeted level of return - or conversely, maximize returns for a given level of risk. Portfolio optimization is achieved by bundling together assets with a diverse mix of risk profiles that cancel each other out when aggregated, and today’s financial engineering techniques harness incredibly sophisticated, computer-powered modeling to achieve this goal.

Of course, risks can never be completely eliminated - and, as “black swan” events such as the COVID-19 epidemic demonstrate, the risks that are hardest to foresee are often the most impactful. However, by prioritizing and minimizing known risks, prudent risk management can give businesses an advantage even in the midst of unprecedented circumstances.

Because every business faces risks, a basic understanding of the principles and process of risk management is an important asset for management roles in many industries. For example, risk management is a core responsibility for project managers, construction managers, industrial production managers, and agricultural managers. And, as discussed above, an education in financial risk management is essential to portfolio managers and other financial analysts looking to balance risk and reward according to investors’ preferences.

For emergency management directors, risk management is absolutely central to their job. These professionals are responsible for preparing plans for responding to large-scale emergencies such as natural disasters and other hazards and coordinating their implementation across a wide range of stakeholders. According to the Bureau of Labor Statistics, they typically have a bachelor’s degree in fields such as business, public administration, or public health in addition to work experience in emergency response or public administration, and they may work in either the public or private sector.

Yes, Coursera offers a wide range of courses in many relevant areas for risk management, including business, finance, and public health. These courses are offered by top-ranked schools from around the world, including Columbia University, the University of Geneva, and University of California Irvine, and offer the same content as on-campus learners at a much lower tuition cost. The ability to complete coursework on a flexible schedule also makes learning online ideal for professionals who want to delve deeper into risk management, whether you want to deliver added value to your current role, want a promotion, or want to change your career entirely.