StrategyDriven Risk Management Article

Extra Steps Your Business Should Take When Risks Are Involved

Running a company is risky business. There is no risk-free way of doing it. So, you should try to learn how to handle risks better. Your business will face all kinds of different risks. Getting your approach to each of them right could turn out to be the difference between success and failure. It really is that important. So, here are some of the extra steps you’ll need to take to keep your business safe when risks are involved.

Get Your Location Right

To start with, your location needs to be right. There are multiple ways in which the location of your business can be impacted by risks. For a start, you will want to be somewhere that gives you the best chance of reaching customers. If you pick a poor location, you risk a poor start that could have a hugely negative impact on the business’s chances of finding success. Then there are environmental risks that should be taken into account. Do you really want to start a business in a location that has a history of flooding or other weather risks?

StrategyDriven Risk Management Article
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Have a Plan for When Tech Disaster Strikes

Tech disasters are very common in the world of business. We rely so much on computers and various other forms of technology. Of course, this has huge benefits. But it’s also a risky way to go about things. Tech can break down or stop working at any time. There could be power cuts or data loss. All of these things need to be planned for properly. There are companies that offer disaster recovery as a service, so look into this if you want an extra layer of protection in place. You should also train your employees on what to do if a tech disaster happens on their watch.

Find the Right Insurance Coverage

Insurance is one of those things that business owners either ignore or view as a necessary evil. Maybe both of those approaches are wrong, though. Insurance can do so many positive things for your business. Therefore, it makes perfect sense to think things through and get the best possible level of coverage for the best price. Unless you put some time into seeking out the best insurance deals, you won’t be able to do that. It’s something you could live to regret when something goes wrong, though.

StrategyDriven Risk Management Article
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Track Your Cash Flow Better

How closely and carefully do you track your cash flow? If you just go with the flow and let it do its own thing, it might work for a while. But before long, things will get messy and chaotic. That is almost always what happens when you don’t track your cash flow properly. Unfortunately, it’s a mistake that is very common as well. Spending money is always a risk in business. If you do too much of it and not enough is coming back into your business, you’ll have a problem. So, keep a close eye on it and make sure everything balances out. It’s a risk that should be simple to manage.

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Can Your Company’s Operations Cause a Black Swan Event?

According to Nassim Nicholas Taleb, Black Swan events are rare, catastrophic events that many retrospectively assert could have been predicted and thus prevented. But can they? Could your company’s operational performance cause the next Black Swan tragedy?

Before we answer the question of whether or not your company’s operations could cause a Black Swan event, I need you to consider your organization’s risk tolerance as we’ll be defining the Black Swan event in those terms.

You see, Black Swan events reported by the media are defined by a much higher impact and scope than what most organization’s can tolerate. So with your organizations unique tolerance in mind, consider the following question sets regardless of how the event might be initiated:

Set 1

  • Does your company’s operations involve significant amounts of hazardous or potentially hazardous materials?
  • Does your company’s operations involve high energy systems or materials?
  • Does your company operate in an inhospitable environment such that inappropriate operations could result in harm to a large number of people or result in significant damage to assets or the environment?
  • Does your company provide a commodity without which a vital service would be impaired?
  • Does your company’s operations integrate with others such that a mishap could bring down a network supporting the provision of vital services?

Set 2

  • Could a relatively large number of people be impacted by an operational mishap at your company?
  • Could a significant asset loss be incurred by an operational mishap at your company?
  • Could a significant environmental impact result from an operational mishap at your company?

If you answered yes to any of the Set 1 and any of the Set 2 questions, your organization’s operations could cause what is for you a Black Swan event.

As a leader of a susceptible organization, your next questions become:

  • How can we recognize the rising risk of a Black Swan event?
  • How do we minimize our risk of causing a Black Swan event? and
  • How can we prepare for a Black Swan event now in an efficient, financially responsible way that balances cost and risk mitigation?

To help you answer these questions, we’ve prepared a FREE video training series: Preparing for the Black Swan. During this online training course, you’ll learn:

  • the warning flags of rising Black Swan risk
  • how to develop a healthy safety culture to minimize the risk of a Black Swan event
  • how to responsibly prepare for a Black Swan event through the implementation of protocols for responding to a Black Swan event should one occur, and
  • how to effectively monitor for rising Black Swan event risk
Click here to register for StrategyDriven's FREE Maximizing the Value of Business Performance Assessments online training series

About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal, and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

StrategyDriven Risk Management Article

Risk Management – Protocols for Responding to Unexpected, Catastrophic Black Swan Events

StrategyDriven Risk Management ArticleBlack Swans events are rare (low probability), catastrophic (high impact) incidents that are seemingly unpredictable, go unrecognized, or are deemed so unlikely as to not reasonably warrant expensive preventive measures. There characteristics include:


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StrategyDriven Risk Management Article

Risk Management – Principles for Responding to Unexpected, Catastrophic Black Swan Events

StrategyDriven Risk Management ArticleBlack Swans events are rare (low probability), catastrophic (high impact) incidents that are seemingly unpredictable, go unrecognized, or are deemed so unlikely as to not reasonably warrant expensive preventive measures. There characteristics include:


Hi there! This article is available to StrategyDriven Personal Business Advisor Remote Access and Dedicated Advisor clients and those who subscribe to one of the article's related categories.

If you're already a Remote Access or Dedicated Advisor client or a related category subscriber, please log in to read this article.

Not a client? We'd love to have you on board. Check out our StrategyDriven Personal Business Advisor service options.

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Why have a Risk Management Program?

Most people think of risk management as an insurance policy, the price paid to help prevent potentially negative outcomes from being realized by their company. Such a view leads to the conclusion that risk management is a business expense with a highly subjective value proposition.

We at StrategyDriven would suggest the insurance view of risk management is far too narrow. Instead, effective risk management enables a company to accelerate its business operations and to become more aggressive in the marketplace; approaches that in today’s fast paced environment is immeasurably valuable.

An analogy we use is that instead of correlating risk management to an insurance policy, leaders should think of it in terms of a high performance automotive breaking system. High performance breaks, such as those on racing cars, enable the driver to reach higher rates of speed while still maintaining the same level of safety as slower drivers whose cars have less capable breaking systems.

In the case of an effective risk management program, earlier warning of potentially adverse events occurs such that less costly adjustments can be made to avoid those risks; allowing the organization to speed its decisions and actions while maintaining the same risk profile as a company employing a less effective risk management program. Thus, an effective risk management system serves as both an insurance policy and a performance enhancer.

To help you get started, we’ll provide you with one month of complimentary access to StrategyDriven’s Risk Management Forum. Within this forum, you’ll find insightful documents on topics such as:

  • Determining the value of an effective risk management program
  • Quantifying organizational risks
  • Setting up effective risk oversight, and
  • Performing ongoing risk monitoring… just to name a few.

To access StrategyDriven’s online Risk Management materials FREE for one month:

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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal, and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.