REDUCE ENTERPRISE RISK WITH A MORE EFFECTIVE RISK MAP
What is the biggest risk your company faces? How sure are you that it really is the biggest risk? If your business already uses risk maps, you may want to consider modifying your risk process based on some of the suggestions set forth below. If your organisation is using a ‘bare minimum’ process of risk planning, consider a new risk management procedure that includes some of the more interactive procedures we have found useful.
An effective risk management process should take a foundational risk map, which is often undervalued, and build on it. A company recently lost a major customer and, as a result, had to completely restructure itself over a painful, rocky three-year period. It barely avoided more serious financial restructuring without a prompt turnaround. Had it faced up to clearly visible customer concentration risk, it would have had a backup plan in place. It could have focused much earlier, and much less expensively, on expanding its client base to give itself greater profitability earlier and more flexibility in dealing with the customer loss. As it is, the company barely made it.
This type of complacency is a common risk faced by all companies of any size. There are other common risks, however. For example, companies in regulated industries that do not face up to the cost of regulatory compliance, companies that do not manage their supply chain and companies that do not focus on their brand presence.
Apr-Jun 2018 Issue
FiscalDoctor Inc.
Law Offices of Robert Barker