You can monitor and control preventable risks — such as those resulting from employees' actions or breakdowns in routine operational processes — by setting rules and using standard compliance tools. But, rules often can't prevent strategic and external risks, neither of which you have much power over. To deal with these kinds of risks, encourage managers to openly discuss them. Use tools, such as maps of likelihood and impact and help team leaders envision risks through scenario planning. Then engage them in finding cost-effective ways to manage those potential risks that can't be avoided by regulation alone.
Source: Harvard Business Publishing : Today's Management Tip was adapted from "Managing Risks: A New Framework" by Robert S. Kaplan and Anette Mikes.