6.2. Risk Management

💡 First Principle: You can't eliminate all risk, but you can decide which risks to accept, reduce, transfer, or avoid. Risk management is the process of identifying, analyzing, and responding to uncertainty that could affect the organization. Security spending without risk management is guesswork — you might spend $1 million protecting assets worth $100,000 while leaving $10 million in critical assets unprotected. Risk management ensures security investment is proportional to actual risk.

What happens without formal risk management? Organizations experience "security whack-a-mole" — reacting to the latest headline rather than systematically addressing the greatest risks. A company spends its entire budget on next-generation firewalls because of a news article, while ignoring the fact that 90% of their breaches come from phishing emails and unpatched servers. Risk management provides the data to make rational investment decisions.

Think of it like insurance: you don't insure every item you own equally. You insure your house for more than your bicycle because the financial impact of losing your house is greater. Risk management does the same for security — it quantifies what matters most so you protect it accordingly.