FUTURE-PROOFING YOUR BUSINESS THROUGH RISK MITIGATION
The concept of security and safety tread on a very thin and often interconnected line that to be effective must be carefully thought about and effectively implemented. Today, these two variables embody and co-exist in a dual physical and digital dimension and each despite having unique peculiarities must complement and support each other for safety and security to be fully assured.
To understand the relationship and scope of safety and security, one needs to conduct a threat assessment. This is a 4 step process to identify possible threats and offer solutions to them.
- Identify threats- what are they and what is their impact on your business
- Assess the threats- Conduct a qualitative or quantitative assessment of the threat
- Develop controls- either through systems, job segregation, verification processes, etc
- Evaluate response- review and test the processes set and continuously upgrade them.
With the above, your organization thus can ask and answer three fundamental questions:
- What risks do we face?
- What is their potential impact on our business?
- What is the likelihood of occurrence?
Ideally, threat assessment starts with a risk assessment that takes several forms including risk identification, risk evaluation, risk elimination, risk treatment, and risk acceptance which if all well done identify and address potential areas of vulnerability for your business.
- Risk identification represents the what, where, and how of the things that could affect the business’s ability to operate
- Risk analysis on the other hand represents the establishment of the probability of identified risks occurring and their potential effect on the business.
- Risk evaluation is the comparison of each risk according to prominence and consequence
- Risk treatment thus is risk response planning; your mitigation strategies are based on the assessed value of each risk.
- Risk monitoring is that continuous non-stop process of monitoring known and unknown risks.
It is thus clear that risks are an ever-present danger to every business, and while some are universal, some are very industry specific. This thus calls for you the business owner to have both a narrow and wide focus on your industry and the larger business environment, constantly monitoring both.
Knowing what risks you face is the first step, next you need to plan for risks, a simple 5 step process to get you and your business ready for any eventuality.
- Preparedness – a two-step process involving:
-Planning/arming yourself with information
-Positioning your organization in terms of preparedness - Respond and mitigate the identified risk. These demands for your business to develop a plan with policies, procedures, strategies, and actions to take around different identified risks.
- Role allocation– with a plan, you must assign roles and duties to team members with a clear leader, mandate, and capacitate them with training and resources, empowering them to take desired action when needed.
- Communication– Risks can be very disruptive to an organization both physically and operationally. It is thus imperative communication lines with clarity, and key messages prepared in advance to keep stakeholders informed, clearly help assess the issues at hand, and also help manage reputation and corporate damage.
- Evaluation. Established businesses or industries conduct drills to test their preparedness for eventualities. Drills allow us to assess our adherence to set requirements, and evaluate and audit our processes in readiness for the real eventuality.
True to all plans that are future facing, preparedness planning demands we think future; about redundancy plans and what-if scenarios for example generators to cater for power outages, working from home, cloud storage, and alternative suppliers or routes to market. We do this by creating scenarios of actual functions and responding with how best to deal with them including a sequence of actions and by whom.
Further, prudent businesses have a contingency plan for their emergency plan; a fallback plan in case the emergency plan fails.
The emergency and contingency plans all seek to strengthen your business response capacity, also known as the business continuity plan that contains a business impact assessment, steps to reduce exposure to identified risks, mitigation guidelines, and your proposed recovery plan. In drawing up your business continuity plan, you must first identify necessary resources- financial, human and technical, develop a checklist of protocols and contact info, and then develop an emergency communication plan and finally a resource list to support your recovery plan.
Indeed an overarching principle for every business is situational awareness; be informed, plan, prepare, and practice as you create scenarios, you need to exercise and implement around risk. Situational awareness is important as some of these risks do not manifest as risks; they may be new technology, competitors, government policies, sabotage, or global politics that in one way or another can impact or destabilize your business. Thus as part of your safety and security assessment of the risks your business faces, you must be adaptable to accept new technology, and trends, and or discard that no longer serves to keep your business afloat in favor of that which does.
Should you wish to get insights and support structures to help you mitigate the risks your business faces be they financial or operational, Springboard Capital is your ideal partner. Through our extensive and informed network, we can help you and your business navigate the unpredictable business world. We also offer various loan products such as Business Loan, Emergency Loan, Asset Financing, Salaried Loan, Loan against Logbook, Import Duty Financing or Title Deed Loan, to help grow and manage all operations. Contact us today at 0700 944 444 or WhatsApp us through the button below, or email us at info@springboardcapital.co.ke.
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Article based on Chris Otieno’s BizSmart Webinar Presentation – Chris is an award-winning, decorated and a BOARD certified Risk, Security, Safety, Health and Environment Management Professional with 2 decades + 2 years of solid Senior management experience in the Private Sector (15 Years), Government Institutions (7 years) and in NGO (5 years). He sits as a member of the BOARD of Waldorf Kakuma Project (WKP) and as the Chair of the Board of Lucky BD Travelers Limited.
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