As a small business owner or leader, you’ll know first-hand that risks come constantly from multiple angles and areas of the business. It’s a combination of understanding, preparation, prioritisation and planning to drive ownership of a risk, mitigating actions and planning should it occur, that enable you to make decisions, protect your business and drive your business forward.
Often combined with decision making, understanding the risks your business faces should be a key focus in leading and managing your business both day to day and strategically. Do you know the risks across your business or of a decision or change you are planning? Can you assess the likelihood of occurring and impact should it occur on your business? Can you use that likelihood and impact to RAG status (Red, Amber, Green) the risks to focus on the most important, potential showstopper, risks to mitigate? Do you have actions in place to mitigate that risk or handle the outcome should it materialise and become an issue?
If you don’t already have one, it’s worthwhile creating a risks and issues log to manage your risks. Capture and categorise those risks to match to your business areas and RAG them for likelihood and impact. If a risk is a green-green it shouldn’t need the same amount of time and focus as a red-red a potential show stopper. As an SME leader, your time and your team’s resource are a precious commodity so using this technique to prioritise which risks to focus on is a good way to manage them, without losing sight of smaller risks that may change. State who owns the risk in your business and the mitigating actions and action plan should the risk occur, and it becomes an issue.
Socialise the risks and issues log with your team for input – team members are likely to have a different perspective so can spot different risks and mitigating factors and may challenge RAG status based on their experience in the business. Give your team that platform to discuss, challenge and suggest.
Maintain awareness and continually update as those risks may change (either internally or external influences can do this.) Having regular risk meetings with the owners of the risks to review and update the plan and for the highest RAG risks making sure your team can recognise potential red flags of the risk occurring and know how to action.
As the famous words of Benjamin Franklin state – “By failing to prepare you are preparing to fail”
So prepare, prepare, prepare!