Risk / Reward
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It’s a fact. Every company faces risk. Whether you are concerned about regulation compliance, security, technology, privacy, fraud or other facets of risk, you are likely focused on risk mitigation and detection. This is absolutely critical to the long term success of your business. So I’m glad you are paying attention to it.
Risk management is usually thought of in terms of cost, particularly time and money. How much time and money has to be spent in order to manage risk at an acceptable level? It sounds simple, but I know this can be very difficult to do in practice. But it has to be done.
Regardless of the type of business you have, a certain amount of risk mitigation must take place. You must protect customer information. You must file appropriate financial statements. You must maintain fair hiring practices. Managing these risks well is not going to ensure your company is wildly successful. Although managing them poorly might ensure your company will fail.
There is another side to risk management that is frequently ignored when creating risk management policies. Having a risk/reward view of risk management will help you see the opportunities that effective risk management can provide.
For example, you can’t do much about hurricanes, blizzards or floods. But you can put a disaster recovery plan in place that allows you to recover much more quickly than your competitors. What if you could recover in hours or a day when your competitors were taking a week or more to get back to business?
Now that’s getting the most out of managing risk.