Author: Angela Crangle

Are you one of those people who has an “if only…” section of your closet? You know, a designated spot for those things you loved to wear back in the day and might like to wear again at some point— if only you could figure out how to make them fit?

The same concept is also at play when it comes to risk management. Many companies are hanging onto their “if only…” strategies when it comes to mitigating risk.    

One size does not fit all

As companies grow and change, so do the various risks they face. A small business just getting off the ground, with a couple of employees and no location to speak of will have very different concerns and exposures than a multi-national corporation with offices around the world.

Part of your job is assessing and managing your business risks not just once, but repeatedly as your organization continues to develop over time. You’ve got to be able to tell when the “if only…” risk management are no longer a good fit. This will allow you to embrace the “what fits your business today” strategies.

There are several types of business risk you’ll need to consider, identify, and manage.

Strategic Risk is associated with your business plan, model, direction, and environment. Even the most well-thought out strategies and plans don’t always work out as anticipated. Sometimes the market, the economy, or some other factor can cause your business model to become weak, unsustainable, or obsolete.

Operational Risk comes from the hidden dangers inherent in the day to day process of running your organization. These could be issues related to system failures or breakdowns in policy or processes. They could also be external events such as theft, fire, or natural disasters. Anything that interrupts your core operation is considered an operational risk.

Compliance Risk refers to your exposure to legal fines and penalties resulting from failure to comply with applicable laws and regulations that pertain to your industry, business, and operations. This encompasses a wide spectrum of issues, including misclassification of employees, safety and environmental violations, discrimination claims, privacy issues, wage and hour violations.

Human Risk is caused by the people who run your business. Humans are not always consistent or predictable. Employees can create risk for your business in a variety of ways: Errors and mistakes, poor management, unsafe practices, inadequate training, theft, fraud, harassment, etc. The more employees you have, the greater the risk. But even if you’re a sole proprietorship, you’re still only human. At some point, you could put your own company at risk.

Technology Risk is associated with the technological systems your business relies on. Power outages, software failures, security breaches, cyber-attacks, and other technology issues can cause anything from minor interruptions to major catastrophes. The same technologies that help you run your company more effectively and efficiently can also wreak havoc on your organization.

Financial Risk is anything that interferes with the ability of your business to maintain positive cash flow. Financial risks can be internal or external and include things like market fluctuations, interest/exchange rates, inaccurate projections, clients who default on payment or internal theft and embezzlement. It can also be as simple as poor budgeting, bad financial decision making, and mismanagement of debt.

Reputational risk has to do with how your business is perceived by potential customers and the public. Things that affect organizational reputation include lawsuits, product failures and recalls, political issues, customer incidents, negative reviews, and social media. Positive business reputations take time to build, but they can be lost in a second. If your company reputation takes a hit, it can result in a significant loss of customers, partnerships, sponsorships, and ad revenue. You may also find it difficult to maintain company morale and attract and retain talent.

Getting on the right side of your risk

Even if your business is still in its lean days, you’ll want to think about what factors could negatively affect your finances, operations, and overall success.

If you’ve already outgrown your startup phase, you’ve probably also outgrown your initial risk management assessment and plan. And maybe even your favorite t-shirt. Which means it’s time to take another look at how you’re running your operations and managing your risk.

Identifying and mitigating potential threats isn’t a one-time job. It’s an ongoing endeavor that’s critical to the health and survival of your organization.

Once you’re committed to evaluating your business risks on a consistent basis, you’ll be able to take your risk management plan from “if only…” to “Looking good!”

 

Content provided by Q4iNetwork and partners

Photo by ninamalyna  

Many businesses have jumped on board the strategic planning train, which is great! When done right, strategic planning can help you focus your time, energy and resources, develop your team and processes, and achieve your organizational goals.

Unfortunately, there are plenty of business leaders who embark on their strategic planning adventure without much thought or intention.

• Some don’t actually know where they want to go or how they might get there.
• Others will start the journey and then decide to go in a totally new direction halfway through.
• Many will commit to a particular destination, only to jump off early— or let themselves get distracted by every shiny thing along the way.

Should your organization create a strategic plan and put it into action? Yes! But only if you have a clear direction and are committed to riding it out through the end.

Keys to effective implementation

For our purposes, we’re going to assume you’ve already put a significant amount of time, effort, and energy into defining your company purpose and vision. Let’s also assume you have a big-picture strategy for how to achieve these things. If that’s not the case, you’re getting ahead of yourself here. Do not pass go. Do not collect $200. And don’t even think about talking tactics.

Go back and start at the beginning.

Once you’ve gotten your key leaders together to figure out and document who you are as an organization, where it is you want to go, and how you’re going to get there, you can move on to the next phase: creating a detailed, tactical plan and actually following through with it.

After developing a solid plan outlining your vision and strategies (think of these as your big-picture ideas), it’s time to begin the tactical phase of your planning.

1.) Consult with your inside experts

Share the strategic plan with your team and give key players the opportunity and authority to help determine which tactics to employ for best results. In other words, let them help build the roads that will lead to the ultimate vision.

This should be done collaboratively, but with a level of autonomy and respect for the knowledge of each discipline. Allow them to be the experts, but ultimately answering back to the company vision.

Involving your internal pros in the process will provide much needed insight as to what is possible and achievable— and sometimes what isn’t.

2.) Set your goals

Think of your goals as the bright, yellow bricks that will pave your road to success. Have your company and team leaders work together to lay them out clearly, and in a way that makes them easy to follow.

Random targets and objectives that pull you in a million different directions aren’t going to move you forward. Off to the side, maybe. But not ahead. Your goals should help you transfer your carefully crafted strategy into purposeful action.

To be effective, your goals need to be:

Specific – Want to be a bigger player in the industry? That’s great! But it’s way too vague for strategic planning purposes. Try something like “Expand service into defined Target Market A” instead.

Measurable – Increasing brand awareness may be something you’re very interested in achieving, but again, how will you know when you’ve made it happen? Deciding you want to achieve 10% growth in website visits will make it much easier for you to tell whether or not you’re succeeding.

Realistic – Goals that aren’t actually attainable are sure to get your team fired up. But not in a good way. Increase production by 150%? Do you have the staff, equipment, and financial resources to make that happen? If so, go for it. If not, scale back.

Consistent – If you have one goal to increase sales by 20%, and another goal to decrease your sales support staff by half, the only thing you’re setting yourself up to achieve is supreme disappointment. With a side of decreased morale.

Flexible – Only time will tell if your goals are achievable. No doubt you’ll need to make some adjustments along the way. Being too rigid with your numbers and metrics is a recipe for frustration.

3.) Make it happen

Planning without action is just as bad as action without planning. Even worse, if you take into account all of the wasted time and resources. Creating the plan is a fantastic first step, but if you don’t take the next steps toward implementation, everyone is bound to lose faith. Including you.

Implementation timelines will vary greatly by organization. The process will be largely dependent on your leadership, your sense of urgency, your company culture, and how ambitious your plan is. The important thing is to keep your energy and momentum going so you don’t get stalled.

To keep your implementation phase on track:

• Make sure leadership takes ownership, leads the charge, and stays engaged.
• Communicate the vision, plan, and progress clearly and often to everyone on the team. Integrate these things into the daily workings and the very core of the organization.
• Assess staffing levels and resources to make sure goals and milestones are achievable.
• Hold leadership and teams accountable to the vision and the plan.
• Resist getting caught in the weeds. Keep an eye on the big picture.
• Meet regularly to review progress toward your goals.
• Be willing to admit when things aren’t working, and flexible enough to change course when needed.
• Celebrate successes and reward your team for their hard work.
• Don’t be afraid to fail. Fear based management stifles creativity, innovation and success.

A good strategic plan can focus your efforts, motivate your team, and take your business to new heights. A bad strategic plan can be a demoralizing dust collector.

Which one will yours be?

 

Content provided by Q4iNetwork and partners 

For more on this topic, check out Is Strategic Planning Really Necessary?, The Strategic Planning Process: Wise Investment or Waste of Time?, and/or Hate Strategic planning? Tips to Take Away the Pain.

 

Photo by Ion Chiosea