Why identifying risk is so important

Ensuring that in your business you identify, mitigate and review risk is so important.

The most successful businesses we work with are the once that planned yesterday for something they are dealing with today. A business that has identified all of the potential risks for their business has a much better chance of overcoming them when the risk occurs.

The best and most simple way of approaching the management of risk is by identifying all of the interfaces to your business: finance, legal, client management etc. Take a step back and think of all of the areas in your business where risks could occur. Write these as headings on bits of paper and put these around the room. Then get all of the specialists from all of the areas of your business and get your team to identify individually as many risks as possible.

Once this is complete take all of your risks and put them into a risk matrix which shows the title of the risk, the probability of the risk occurring, write down your planned actions to mitigate the risk, and then the probability of the risk occurring post mitigations.

The reason to identify and review risks is to ensure that you manage your business risks and mitigate the negative consequences if they occur. So, ensure that you have a process in place to manage your risks going forward.

A risk review as part of your board meeting is always a good use of time.