Dear Aunty B,
We are a medium sized business in a very volatile sector.
We did a risk management report last year, but I lie awake at night and worry about all the things that could happen to the business. Is there something more I can do?
And where is that risk management report now? Shoved into the back of a drawer?
But at least you have a report. Many business owners completely neglect this and have no idea of the potential risks to their business.
This is the time to revisit it again. Have a look in depth at the environment and at your operation, and objectively ascertain what could hurt or wipe out your business.
You are looking for social, technological, and particularly economic, trends that might damage the business. You should also look at your major suppliers and customers. What is happening to their customer’s customers? How are they being affected? How are they changing?
It is a crucial time to follow the news – economic, technological and social (that is, read SmartCompany everyday!).
And make sure you are not too reliant on just a handful of clients, distributors, suppliers – how can you spread the risk further?
This is also the time to watch your competitors very closely. (Don’t tell me you have none. I don’t believe you.) Are they introducing new products? Are they snaring your customers through better SEO/SEM strategies? Are they going to launch a price war in this downturn?
You should also focus on your key staff. Are any likely to leave or become ill? What is the succession planning, documentation of knowledge and training?
Lastly money. What if you wake up next week and the bank is stroppy?
My feeling is once you do your report, you will be far less worried at night.
Oh and by the way, guess what the hottest job in Australia is at the moment? Chief risk officer. This position is usually bundled into the chief financial officer’s job. But given the current environment, CFOs are suggesting all over the country that someone else takes the can when the gig falls over.
The answer? Appoint a chief risk officer who reports straight to the big boss. All sorted.
Is that an option for you?
Yours in risk,
Oh and PS: See blogger Louis Coutts’ blog today for more on meeting competitive threats.