Managing Risk
Now that you’ve identified and assessed your risk-baseline, you’re ready to manage it. Managing it could mean a couple of things. You can a) do nothing b) transfer risk or c) minimize risk to ultimately take your results from undesirable outcomes to more desirable situations.
When faced with risk, most of us do absolutely nothing. The funny thing is that inaction is also a choice that will affect your business. But once you’ve made a decision to master your fear, start with a Plan A: the ideal scenario for any given task or decision. Remember, when you’re dealing with external stakeholders including suppliers, customers, staff members, you will likely need a Plan B, C and D.
As a rule of thumb, you can control one variable in your business: you. But, as your company grows, more people and circumstances will be out of your control. Painful—I know—but it’s a risky reality that determines your ultimate reward. Decide how you are going to manage the risk you’ve outlined above. You can do one of three things:
- Minimize and reduce risk by creating a backup plan (Plan C) for the backup plan (Plan B).
- Transfer risk by outsourcing internal operations to highly qualified and specialized third parties with a vested and monetary interest in getting it right the first time.
- Or accept the risk. A high priority project may be risky and necessary. Prepare for a loss and develop safeguards to ensure a gain. This could include increasing dedicated resources including money, staff and time to a specific project and cutting back focus in other areas.