16. Risky Business – 5 Straightforward Strategies
Recently, I watched the 1980’s hit Risky Business for the first time. Except for the iconic scene with Tom Cruise sliding across the floor in his socks singing Bob Seger’s Old Time Rock ‘n Roll, I wasn’t a fan.
But the movie did get me thinking about business, strategy, and risk. (Scary, huh?)
Strategy, at its core, involves making decisions in the face of uncertainty. It’s defining what you will and won’t do, testing hypotheses, prioritizing, following through, and correcting course, as needed. Uncertainty brings risk. And opportunity and risk are two sides of the same coin. After all – No risk. No return.
As small businesses scale and grow, one thing remains constant. Change. From infrastructure to processes, people, systems, and more. Having a clear risk picture and proactively managing your risks across these changes is key. Numerous frameworks exist, and none is perfect. Pick one, norm on terminology, and follow through.
Here are 5 straightforward strategies you can start using today –
1. Establish – Often overlooked, it’s important to establish your strategic context and ensure your strategy, priorities, and goals align with your risk philosophy and risk appetite.
2. Identify – Create a Risk Universe to identify and categorize risks. 4 key types with examples –
Strategic – A new competitor, shift in addressable market, a global pandemic
Operational – Access to talent, R&D, failed technology
Compliance/Legal – Regulatory, privacy
Financial – Access to capital, cash flow
3. Assess – Develop a Risk Register to assess the severity of each risk based on likelihood & impact. A simple High, Medium, and Low scoring methodology works.
4. Control – Determine how you will respond to, or control, each risk. Will you mitigate, transfer, avoid, or accept?
5. Monitor & Report – Monitor progress and report regularly using a consistent dashboard, incorporating lessons learned. Then head back to #1.
So, what does it look like for your business?
What are your risk philosophy and risk appetite?
How are you identifying and assessing potential risks?
What are you doing to control them?
What does your risk dashboard look like?
What is one thing you can do today to drive greater clarity?
I help small technology and professional services businesses scale and grow.
This means leaders work ON the business instead of IN the business. Whether it's a 10-year vision, 3-year strategy, or 90-day action plan - we partner to achieve your goals.
If you want to break through to the next level in your business, drop me a message, and we'll arrange a 15-min call to see if I can help.
To your success,
~Susan
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