Risk is constant in the business world. Ignoring risks does not help the organizations in managing them. On the contrary, understanding the enterprise’s exposure and practicing risk management are the initial steps toward a healthier business. In this article at Forbes, Eric Hutto shares some ideas on what you can do to be better prepared for the future.
How to Examine Risks
Take A Holistic Approach
“The risks identified by the finance department would be different than those called out by the distribution, human resources, IT, legal or sales departments,” says Hutto. Before the COVID-19 pandemic, organizations approached risk management with the siloed methods. You must remember that risks do not fall under one discipline. Additionally, risks may fall between silos.
Establish a Risk Culture
Managers at all levels and employees must have a common understanding of their organization and its business purpose. As a business leader, you must talk about what is considered a failure. Furthermore, know what you learned from taking a particular risk. This will help you repeat successes and avoid mistakes.
Take More Chances
Run risk scenarios to assess how bad risks could be. Many business leaders did not run risk scenarios on the pandemic. Therefore, they failed to understand the kind of risk it presented.
Complete an After-Action Review
Consider the following questions in your action review plan.
- What was the intended result?
- What actually happened?
- Why was there a difference?
Build a review into every project and apply these solutions to your future projects.
Enterprise risk management looks different in every company, but constant monitoring—not just of risks but of the process itself—is key to its success.
To read the original article, click on https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2021/03/16/business-leaders-need-to-reconsider-how-they-assess-risk—heres-how/?sh=65fea1d03211.