How To Manage Risk in Your Business

 

“The biggest risk is not taking any risk…In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

– Mark Zuckerberg

When it comes to dealing with risk management in your business, it’s easy to view the problem as something to immediately solve. We tend to take on the approach of minimizing as much risk as possible. But a basic fact for any business is this: risk is inevitable. Understanding what exactly is at risk and how to use that risk to your advantage, can be a pivotal element of success.

If you are beginning to evaluate the risk in your business, there are a few questions you can ask yourself: What areas seem to be less successful than others? Can some of my success be improved upon further? Am I looking at the market long term? Am I utilizing changes in technology and efficiency? Just as you may have a team or designated time to focus on innovation, a focus on risk management can be equally beneficial. After all, innovation and risk management can heavily influence one another.

However, just as innovation requires creativity and taking chances, risk management should also be about taking calculated risks, not just preventing risks. If you truly want to see growth in your company, there will be multiple times in which you must take calculated risks to see exceptional results. Sometimes, it’s about taking the right risk instead of no risk at all. Still, it is important in these moments of calculated risk taking to always have a secondary plan in place in case things don’t go as you anticipate.

Success in business comes not only through working harder, but also through working smarter. Approaching risk taking in this same way can be vital. Intelligent and well thought out decision making is obviously important in all areas of business, but it’s important to remember to carry over that intelligent decision making even when it comes to risky business moves.

Kelly D. Scott
Chairman/CEO
The world’s leading business advisory and executive coaching organization