Overcoming risks to keep up with competition
Life is full of risks, and nowhere is this truer than in the business world. Ten years on from the financial crisis, risk management has evolved from a promising recourse to a core fundamental of competent strategic management.
Managing risk is particularly crucial if your industry is fierce with competition, since your business setbacks create opportunities for rivals.
Tight risk management means you can protect your turnover and help the business sail ahead, even when times are tough.
Set up a team for analysing risk
The first step to securing your company is to create a team, who will be responsible for ensuring business processes are up-to-date and managed from a risk perspective. This should include key players from each of your departments – marketing, human resources, finance, IT and legal.
Combining departments is often a more effective approach than creating a separate risk management department, because risk runs through your entire business. Your risk management strategists need to understand how each department operates on a day-to-day basis.
Next, encourage each department to see view their work through financial risk lens. To aid with this process, try a RAG Status template, like those featured in this selection from Business Docs.
Organising individual tasks and deadlines by the level of immediate risk will help you to stay on track, identifying solutions as soon as possible.
Identify your competitors
Locate other businesses in the same industry, or fields that intersect with your own. Gather information in the public domain, researching key areas of investment and their apparent business priorities.
Evaluate the level of threat each competitor poses, and act to eliminate this. A proactive approach will help shield you if disaster strikes.
Identify risks – and a contingency plan for each
To identify the key risks your business faces, consider resources and infrastructure you rely on to continue daily operation. This could include machinery, premises, or even ‘invisible’ resources like staff or data sets.
Insurance is a necessity, but you also need a contingency plan for every eventuality. Focus on maintaining cash flow with minimal disruption, then communicate your contingency plans to create a culture of risk awareness throughout your organisation.
Focus on customers
It’s important to ensure your business is protecting customers, because when risks become severe, it’s easy for competitors to snap up unsatisfied clients.
Take a serious approach to data protection, and offer quality customer service that keeps clients feeling valued in the long term.
Invest in cybersecurity
Cyber threats continue to evolve, posing new threats to businesses all the time. Your business relies on technology more than ever – so it’s worth investing time and money in cybersecurity.
The government has a range of cybersecurity training resources, and these provide a good starting point for bringing your employees up to speed.
Conduct a business impact analysis
A business impact analysis (BIA) is a useful tool for predicting the consequences of disruption. This type of risk management planning involves developing recovery strategies – something every business leader should know how to use.
You need to enter an analytical mindset, which focuses on the business itself. You could prepare a questionnaire to help with envisioning the impacts on each key part of your business infrastructure.
The more detailed the BIA process, the better guarded your business will be.
