Risk Management Tips From the Experts
Every new business opening its doors needs to deal with one important thing: Risk. Everything is a risk. Every investment, every hire, every decision comes with risks, and a good manager will know the importance of acknowledging these risks, but not allowing themselves to be guided by the fear of things that can go wrong, but rather carefully weighing the opportunities. So whether you’re starting a business, handling a new project or just want to expand your horizons, here are some tips from the experts on how to manage your risks.
One of the biggest downfalls of any business is when there are gaps in responsibility. What does this mean? There are just some things that nobody is willing to accept as part of their job and they just assume “somebody” is going to handle it. But Mr. Somebody isn’t on your payroll and they aren’t going to take care of a thing. So make sure that there’s one person on top who is supervising the entire project or workload and making sure that there aren’t any tasks that are delegated to “somebody” and bring responsibility back to the people on the floor.
Trust the Data
You can’t make any good decisions without consulting the data you have. The experts from RadarLogic say that you need to keep a close eye on both external information and internal data that you collect. Guesswork and “gut feeling” might work sometimes, but they will never be as reliable and good, old, unbiased data. Learn how to spot the trends in the data and react accordingly, as it will help you predict and minimize risk.
Don’t Put it Off
If you spot a problem - tackle it immediately. If you have problems that are of a higher priority at this moment, assign the new problem an appropriate priority marker and make sure it doesn’t just continue existing as a “mental note” that you’ll definitely never remember again. But a bigger problem occurs if you have an issue that you are consciously putting off because you don’t know how to deal with it. Issues like these will only continue to grow and you might even internalize a feeling of shame because you didn’t know how to deal with them on time, so you put it off even more. Just deal with things as soon as they pop up.
Place Safety Mets
One key way of risk management is taking steps of precaution and making sure that if things don’t turn out exactly as you wanted them, the damages will be minimized. This could be done by locking away some assets so they can’t be affected by the risk or just very carefully and slowly changing things and having a break you can pull at any moment.
When assessing risks, it’s important to be very realistic. No optimistic predictions or expectations that are not based on data and careful analysis. This is why it’s always a good idea to have a team of people doing the assessments because more viewpoints will give a clearer picture and make sure there aren’t any details that aren’t being considered.
Have Several Backup Plans
When things inevitably do go south, you will need to think of the best way to set the ship back on its course. You need to have a plan in place for what you will do, but it’s even better to have multiple variations of the plan so that you can use the one that you think would fit the situation best. In risk management, it’s rarely an A/B choice. There are a million things to take into account, so when you’re creating your backup plan - keep the options open.
If things go right or if they go wrong, you can’t just pretend they didn’t happen and move on. After a big move, always do a post-mortem analysis and talk about everything that went right or wrong. Keeping everything in writing will allow you and others to look back on it and make better moves moving forward. This is especially important in larger companies where there are entire teams working on risk management who could benefit from all of this precious information.
Risk management is one of the most stressful positions you can claim, but when you get it right, it is just so rewarding. If you’re not a risk manager, but you have a growing company - you want to invest in a risk management consultant, if not even someone in a full-time position, and you can thank yourself later.