Risk Management in Business
No business is short on challenges in its quest to further its growth and development, particularly in its early stages. You could in fact argue that there are two sides to a ledger that businesses exist upon: on one sits the small and early-stage businesses, with the odds of long-term survival set against them, and on the other sit big, established companies, with seemingly every advantage to perpetuate their existence. To navigate those long odds, the startup or small business has to navigate carefully through treacherous waters, spotting and steering clear of dangers as the present themselves.
Managing the risks that come with any business is not something that anyone particularly enjoys; we’d rather be rid of them entirely, free to focus all of our energies on more productive efforts rather than preventative. But risk insists itself upon us regardless of our desires, and dealing with it becomes another of the less-than-pleasant tasks asked of us as entrepreneurs. So what is required in a responsible handling of the risks that imperil your company’s future?
Identify. Any attempt to bring risk under control requires knowing what those risks are. Finding and identifying those risks requires a thorough consideration of all aspects of your business. Some risks are easily identified, both in terms of the physical actions and tasks required of your job and/or the nature of the work you do as it rests against security. It’s the risks that remain unseen unless searched for that can pose the greatest threat if left uncovered. In an effort to protect your company’s prospects, it’s crucial to be both honest and thorough in identifying all potential risks; simply not thinking about them won’t make them go away.
Assess. Once you’ve identified the risks presented, you have to assess the nature and severity of each risk. How likely is each to happen, and what would be the potential impact of such an occurrence? Here again honesty is required; the task is assessment, not assignment, and grading a risk low isn’t going to change the nature of it to something less than it is simply by giving it a lesser score. Take all measures into account in noting a risk: frequency and repetition add to a potential risk, and severity can range from a basic harm to catastrophe, depending on the nature of your work.
Control. You’ve assessed the various risks extant at your work; now comes the time to try and control and mitigate those risks. Some risks are easy to all but eliminate — if there’s a set of actions wholly unnecessary to your work that present a risk, simply forbid employees from those behaviors. Likewise, some tasking has safer alternatives to achieve the same means, and those safe alternatives should be insisted upon by you and your management teams. Other instances of risk are not so easily avoided, but steps can be taken to lessen the risk and the potential harm that might be caused. While risks might still exist, you are at least aware of them, and have done what you can to lessen them.
Monitor. Vigilance is the watchword of safety, and consistent monitoring is required to maintain the standards put in place. Everyone is guilty of getting a bit lax and sloppy in the absence of pressure or reminders to follow assigned practices to the letter, and the lack of incidents that highlight risks serve to breed complacency. Timely reminders of what best practices are for safety and security and risk management might seem tedious for all involved, and without a guarantee that the message will stick with any in the audience, particularly those afflicted with said complacency. But you have to make the effort to continually hammer those points home, and if education won’t work, taking disciplinary measures might be required for repeat offenders. No one enjoys being the taskmaster doling out punishment, but establishing and maintaining standards requires employees to know that someone is there upholding the rules.
The nature of risk is such that none of what you fear might happen ever comes to pass, or that things entirely unforeseen might beset you. Like any sort of plan, a strategy of risk management can only do so much before you reach the outer limits of things within your ability to control. Faced with the terrifying potential of the unknown, it’s tempting to throw your hands up and consign your fate to higher powers. But business is ultimately about what we can do, taking what control we can, and managing the risks to the best of our ability is what we owe ourselves in our effort to build a lasting company.
This article was written by Mary Juetten from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
