You may be unaware, but you are in the risk business. In fact, every business is – no risk, no business! But before you start squirming, remember that if you hide from risk you hide from its rewards, because very often the biggest risks can provide the biggest opportunities.

The difference between success and failure is how you manage risk. We all need to change our perspective from seeing risk as a constant threat to be avoided, and instead noting the opportunities for gaining a competitive edge. So, in this article we are going to provide some tips on how to manage all this risk, and even turn it into opportunity.

Tips for Risk Management:

1. Get ahead of regulation. It is more constructive to invest ahead of time and be on the right side of regulation than to face legal action and fines in the aftermath.

 

2. Use technology to innovate and disrupt whatever risk you’re heading toward.

 

3. Be aware of potential reputational risks, and then identify a strategy to mitigate them. Look all the way through your supply chain and carry out sound due diligence.

 

4. Map out environmental risks and stay on top of your ESG reporting.

 

5. Work out a strategy for resilience. It is your job to ensure a long-term future for your company.

 

6. Communicate the benefits of planning around risk, internally and externally. Investors are looking at risk avoidance as a way companies maximize revenue and minimize costs.

 

3 Classic Business Risks Turned to Your Advantage

Here are three examples that illustrate how successful organisations can use risk as an opportunity to improve business performance:

• Supply Chain Risk

The Risk

Supply chain break down- impacting your customers and your company reputation.

The Opportunity

Re-evaluation of every supplier revealing opportunities for improvement. You may notice you rely too much on one supplier and a thorough audit may reveal an opportunity to diversify and spread the risk. Equally, you may find that you can save money and increase efficiency by consolidating multiple products or services into one supplier. It may be a good opportunity to renegotiate and get a better deal. Or discover alternative suppliers offering better value or a better sustainability policy.

• Compliance Risk

The Risk

Non-compliance – leading to legal fees, fines, and damage to your company reputation.

The Opportunity

To mitigate the risks of non-compliance and make risk management part of your company culture. You could empower employees with appropriate training to identify and manage compliance risks more effectively, boosting job satisfaction and company reputation. You may also discover that by leveraging tools and technology to streamline processes you can improve monitoring and significantly cut down audit times and costs.

• Risk of Losing Staff

The Risk

Talent and knowledge loss can pose a substantial risk to your company- resulting in loss of productivity.

The Opportunity

To retain talent and knowledge. When digging deeper into this risk you may find that investing more in your brand and company culture will help you attract and keep staff. Considering an agile workforce policy or flexible working hours may extend your appeal. A compelling company culture embraces digital transformation, flexibility, development opportunities, and diversity.

Alternatively, an integrated GRC enterprise-wide platform could help you capture and retain knowledge. Giving you some protection against staff turnovers, market downturns, budget cuts or retirements.

 

Risk management can be a tool for long-term strategic thinking. You can analyse risks to determine if there are potential opportunities that your organisation can benefit from, as a result of those risks.

Strategic risk management is about much more than addressing what might go wrong. The real value comes from seizing opportunities to take calculated risks that will enrich business performance.

Contact 1RS today to learn more about how to use risk to gain your competitive edge.