Business Risks – Recent Observations

Since returning to the UK I have been able to hold a number of discussions with business owners, company executives and private individuals. One of the things that continues to strike me is the lack of understanding about the organisational risks that exist and can directly impact companies whether small, medium or large.

As organisational risks are not always understood they are therefore not seen as a management priority. I find this strange as it is risk events that can result in loss, injury or damage which can have a consequential impact upon the organisations financial standing, operational effectiveness, staff safety and welfare or reputation.

Unfortunately in many cases managing risks seems to be a reactive action following an event or incident instead of organisations benefitting from the positives that proactive risk management brings.

Whilst some risks are readily identifiable (armed attackers, theft, war etc. ) there are many others that go unnoticed or unconsidered, including:

  • Vetting of staff.

  • Induction training.

  • Information security.

  • Researching of external markets.

  • Prospective partners/service providers (due diligence of).

  • Travel risk management.

  • Industry specific risks (anti-vivisectionists etc.)

  • Cultural risks.

  • Emergency planning.

  • Crisis management.

By understanding these risks protective measures can be introduced that help manage and mitigate the risks, these include:

By using a combination of the above measures most risks can be better managed, especially where the layers are overlapping and intertwined.

To conclude, I would always recommend that smaller businesses or those developing and expanding into new markets have a thorough understanding of risk management processes either organically or via external training. If necessary, professional help and assistance from consultants or in-house staff can prove very cost-beneficial.

By addressing the above the chances of business interruption or disruption are minimised; meaning profits can be maximised. Doesn't that make sense?

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