If we go for a drive, we put our seat belts on. OK, it’s the law in many countries, but as most humans are risk averse, we do it because we are worried that if there was an accident, we would be worse off if we didn’t have it on!
This is Risk Prevention. This is something every business should be doing from day one. I’m amazed to meet so many businesses that don’t even look at risk, let alone think the ‘what if’ scenario. The cost of trying to recover from a ‘business accident’, both financially and personally can be staggering. So why aren’t so many businesses Risk Aware?
The simple answer is they believe it won’t happen to them.
Companies that were around in 2007/2008 learnt a hard lesson about risk. When the global crash came there were not many businesses that didn’t feel some pain, even the big ones! But, for some small and medium sized businesses it crippled and killed them.
I know that there are some things you just can’t do anything about, but there are a lot you can. Supposing you are a manufacturer and your supplier closes and you are in mid run and need his products? If you had asked the ‘what if’ question when working through your production stages, you would have identified 1 or 2 more suppliers and have them lined up to fill that need.
Maybe you are a service provider, you host other businesses IT servers and your main power supply goes down. Yes, you have your UPS that last for 2 hours, but after that? If you had asked the ‘what if’ question when preparing your business plan, maybe you would have installed a diesel generator, for the ‘just in case’ scenario.
Risk Prevention doesn’t need to be costly, it just needs to be identified and understood. The risk must be assessed, prioritised and then if necessary, have something put in place to reduce or eliminate it. But, don’t just look at yourself, look at your first-tier suppliers to, that includes service providers, for example electric or IT.
Finally, one thing to remember, risk is everyone’s responsibility. So, to be effectively risk aware, include all your staff, from top to bottom. Make Risk Awareness part of your business culture. To coin the old Scout motto, ‘Be Prepared!’
If you want to know more about Risk Management or how ISO 9001:2015 Quality Management System can help you with your business's Risk Management email: firstname.lastname@example.org or visit our website at www.csa-consultants.me