While most answers you might have found out there are formally sound and illustrate extensively what “enterprise risk management” is like for big organizations, I thought it would be beneficial for me to share a lighter version that could be more relevant to business owners.
In business or in life, the moment you have a goal or a plan that you want to achieve, you have to remember that it comes together with its risk, because anything that can stop you from achieving your goal or plan can be a risk to you. Yes, this may be super obvious, but the fact that many business owners still are not familiar with risk management makes this worth being mentioned here.
Why is this topic important for you as a business owner?
Having worked with organizational leaders and top business management to manage their enterprise risk (i.e. identify what’s their top risk associated with their goal, facilitate their process of refining effective mitigation or action to address the risk, and monitor the risk exposure regularly), I have witnessed and have been part of how enterprise risk management has helped multi-billion-dollar companies to:
Be wisely agile in the midst of an industrial crisis to continue delivering business objectives which would not be possible had risk not been actively managed and monitored.
Establish a major operational hub as the result of proactively mitigating/addressing the top risk, and closing the financial year with excellent business results exceeding the very stretched business targets set early in the year, made possible by this effective operational hub.
Smoothly and timely adapt to a drastic change to local hiring policy affecting over half of the critical business positions, and successfully continue normal business operation without jeopardizing the business commitment to major customers and violating any legal requirement.
What can risk management do for your business?
As a 6-8 figure business owner, embracing business risk management in your business could mean:
As you learn that focusing on ONE thing at a time can propel your business further, you can be well-informed about which ONE area you should focus on at each stage of your business by systematically identifying your top risks.
You can have fewer or no more sleepless nights thinking about how to handle those ad-hoc unpleasant cases like when an ill-hearted customer sabotages your business reputation on social media for selfish interest, or when your live event speaker disappoints you at the very last minute that he/she won’t be able to make it to your prestigious event which you have worked so hard to reach your paying attendees - all because you have your best Plan B’s mapped out on standby.
A smoother synergy with your small team because you have systematically identified which key processes to refine and infuse more of you to make it super clear and easy for your team to follow and take care of that part of your business, while they handle cases like you, write and reply to emails like you, and let you go on your much deserving vacation break without having to keep checking your mobile device to see if everything is okay leading up to your next project launch as you chill by the beach.
So, does your business need risk management?
Maybe not if you already have your own better way to achieve your goals effectively, which I believe does involve risk considerations directly or indirectly, just not in an obvious or structured way.
But it's good that you start embracing business risk management, or at least start thinking about risk management as an opportunity for you and your business.
You can search for and find a lot of information on Enterprise Risk Management (ERM) online, just note that most information about enterprise/business risk management out there is very much more relevant to bigger organizations than to small/medium business owners.
Or for an easier-to-follow risk management process tailored to your business needs, you are always welcome to reach out to me, as that is what I specialize in.
Still not sure what to do next?
I have done the hard work studying the major causes of the top risks identified in my most recent risk assessments on business, career, and even marriage goals respectively.
You can start with the free resources I have developed to help you take your first step in addressing the top business risk: Go through this Business Potholes Heatmap Checklist, it should help you to start getting ideas flowing.
Have more questions? Share your thoughts in the comment below, or chat with me about your needs.