Tips on How to Manage Risks

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RiskBusiness risk poses an uncertainty that leads to potential negative impacts. In managing risks, you can look for ways to minimize the likelihood of occurrence and mitigate its impacts should it occur. There are several questions you could raise to address both areas. To minimize the likelihood of occurrence, ask:

  1. What is the source of the risk?
  2. What are the key elements that trigger the risk?
  3. How much influence does your business have on the source?
  4. What could you do to prevent its occurrence?
  5. Could you collaborate with others, even competitors, to minimize the possibility of occurrence?
  6. Is there a way to detect the changes associated with the key elements to monitor the risk?

To mitigate the impacts, ask:

  1. How well can you identify the impacts with specificity?
  2. If the impacted area was in the core business, how quickly can you respond?
  3. What actions can you take to contain the impacts so that the effects won’t propagate?
  4. Is there a plan to combat the source directly to minimize the negative effects?
  5. Can you create a new option that offsets the direct path of attack?
  6. How long can your business sustain?

Depending on the nature of the risk and the state of your business, you might be ready to abandon the market or the way you operate. So preparing how the company would handle the risk helps to expedite the transition. However, if the risk was in the path of growth, you would need to take a more aggressive approach to minimize the possibility of occurrence and mitigate the impacts. How well you are able to weather the risk depends on how prepared you are.

Comments

  1. Business Risk is as important as risk undertaken in other fields like travel and construction. Managing these types of risks properly is very important as they can build or break individuals or businesses financially. These are few excellent tips to manage such risks. So, make sure you follow it step by step to avoid and mitigate risks.

    • Great reminder. Understanding the nature of risk, its impact and identifying how to mitigate are so important.

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