What’s the Risk?
By Becky White, Vice President / Organization Development, Sain Associates
My first introduction to risk assessment was a childhood Bible lesson about the wise man who built his house on the rock and the foolish man who built on sand. While there is an underlying theological message in this parable from Matthew, there is also a superficial message about risk assessment. The wise man thinks ahead, considers the possibilities, then plans and acts to minimize adversity.
Risk assessment is a common business tool for identifying situations that might threaten your business operations. It is most often applied to safety issues or disaster recovery. Risk assessment is the Threats portion of the ubiquitous SWOT analysis in strategic planning. Most often the focus in risk assessment is external, considering outside influences such as economic changes, new market competitors, industry changes and natural disasters.
Thinking about the big external factors that shape your business is important, but so is an assessment of internal risks. These derail businesses more frequently than most people would like to admit. Our financial, marketing, operational and workforce assets and systems all contain certain risks that need to be identified and managed with contingency plans. A good strategic planning system incorporates risk management into a regular cycle of assessment, planning and execution to minimize unwanted surprises.
At Sain we are taking our corporate risk management efforts to another level this year with Team-level risk assessments. Each work group within the company is being asked to assess potential threats for their team that could have an impact on the company at-large. A risk assessment template is provided to guide the process. When all team assessments are complete and combined together, our corporate leadership will have a comprehensive assessment for which remediation strategies can be developed.
Have you thought about the risks within your business lately? A new year is a great time to commit to doing this high importance/low urgency task. Don’t be the man who built a house on sand. Think ahead and be prepared for adversity.