Why is Risk Management important to your business?
An Article by Mike Sizemore
If you are running a business, one of the things that is most important to your success is risk management. There are many different types of risks that can affect your company in ways that could be disastrous. Fortunately, there are some steps you can take to minimize these risks and keep them from getting out of hand. In this article, we will discuss what risk management means for your business and how it can help protect everything else in your life.
Risk management is simply the process of minimizing and dealing with any risks that may affect your business. When you think about it, we all deal with risk in our lives on a daily basis – whether we recognize it or not. For example, if you leave for work every day at the same time and drive along an established route to get there, you are already practicing risk management. You recognize that there is a chance something could happen along the way (such as an accident or traffic jam) and plan accordingly to avoid it.
Risk management can be very simple for some types of business risks; however, other types may require more complicated solutions like insurance packages or even contracting with a risk management expert. It all depends on the type of risk you are facing and how much damage it could potentially do to your company.
So what do we do first? Identify the risks in your organization. Are you aware of all the potential issues that could arise? Are there any gaps in your company’s safety net where they’re exposed to disaster or loss? Some risks are easy to identify, but others may take time for you and your team to uncover.
Once identified, you can prioritize them according to their level of risk. Then, determine how you will address each one. How will you minimize these risks? Will insurance cover the damage if something does happen? If not, do you have a contingency plan in place to keep your company afloat while you weather the storm until things get back on track?
If there are any gaps or areas where your risk management strategy isn’t as strong as it could be, call in the experts to help design the right plan for your company. Whether it’s an insurance broker or a risk management consultant, finding the right expert can help you minimize your risks and increase your company’s bottom line.
And finally, putting the right plan is place is simply not enough. You must continually revise and revisit your risk management plan to make sure it fits the needs of your company. As the industry changes, so will your risks and how you manage them.
Here’s a tip for getting started in your organization. Ask yourself this question, “Who in our company knows more about our risks are than anyone else?” The answer: your front line staff. Talk to them about the risks they face on a daily basis. Ask what you can do as an organization to help minimize those risks and reward their efforts for keeping your business safe.
Next, make them a regular part of your safety team. Have them meet with you on a regular basis to discuss their concerns and how best to address these risks. It’s a fact that front line staff positions are where many of your biggest opportunities for risk management exist, so make sure they’re involved in designing a plan that works for everyone.
As they see you responding to their ideas and concerns, these team members become some of your best brand ambassadors. They’ll feel valued and respected by your company, and be motivated to do everything in their power to contribute to a healthy working environment.
So what are you waiting for? Take the first step to improving your risk management plan by giving your staff a voice in the process. They’re already up for this challenge, but you have to show them that their input is welcomed and appreciated.
Safety and managing risk is everyone’s responsibility. If you want a truly successful risk management plan, the best thing to do is include everyone in your organization.
This article is the first in a four part series on Risk Management and Safety provided by Mike Sizemore Consulting and The Omni Insurance Agency. The contributors are Mike Sizemore, a graduate of Georgia Southern University with over 30 years of experience in leadership, management and customer experience.
For additional information or to book an appointment, simply contact Mike Sizemore by email at mike@mikesizemorellc.com
