Every business faces some type of risk, whether legal, financial or compliance. While you cannot remove business risks altogether, you can prevent, contain or minimize them. To that end, you should use the right tools and systems to identify and analyze risks at an early stage.
Managing every potential risk manually could be a time-consuming and resource-intensive process. That’s why you need an automated system to monitor and reduce risks across your organization. Thankfully, a modern business operating system comes with risk management capabilities. For instance, an advanced company operating system can automatically handle your legal inbox, identify risks and send critical requests to a legal expert. Here are some tips on how to manage and reduce your business risks.
1. Perform risk mapping
Start your risk management with a thorough analysis of all potential risks to your company. Perform risk mapping to identify and prioritize risks and then rank them on their severity and likelihood of occurrence. You’ll find certain risks more likely to occur than others. Likewise, some risks could be more dangerous than others. Once you have performed the risk triage, you can easily decide which risks are priorities. Remember, just because a risk is less likely to occur doesn’t mean that you should not address it. In some situations, you should prioritize risks that are less likely to occur but have the potential to cause serious damage to your organization should they occur.
2. Create a risk management plan
Once you identify your key risks, the next step is to develop a plan for managing them. For instance, consider buying adequate insurance to protect against those risks. Depending of the nature of your business, you may want to invest in professional insurance, life insurance, completed operations insurance and disability insurance. However, buying insurance is only the first step. You should also create a back-up plan for risk management. For instance, it is always a good idea to train two people for one role. That way, if one person is unable to perform the job, another person can take over.
3. Use automation and analytics
Thanks to technological advances, you can now easily find tools that help with risk identification, assessment and analysis. Using these tools is a good way to make sure risk management does not hamper your day-to-day business operations. For instance, you can use a business operating system that automatically tracks your legal approval requests and issues alerts when required. A more advanced company operating system can even help streamline risk monitoring by giving you a holistic view of your enterprise risks. Some tools even allow you to analyze, measure, and act on your key business risks.
4. Keep a positive mindset
Do not always look at risks as a negative thing. A risk assessment also gives you an opportunity to spot any loopholes in your company operating system. If you can act on them and take preventive measures, you can avoid or reduce similar risks in the future.