So what is the best way to practice risk management in your everyday life? How about living and breathing a safety-conscious environment 24/7? After all, risk lurks everywhere, and whether one succeeds or fails in business can hinge on the ability to recognize risk for what it is at every turn (whether financial, behavioral, or physical), and work to sidestep it as much as possible.
Here are Just a Few of Many Potential Sources of Risk:
- Safety and health
Of course, it’s impossible to protect one’s business against virtually any calamity that could happen, but a savvy manager or owner will early on select an experienced professional insurance agent to analyze the company’s operations and devise a comprehensive risk management program that offers protection from a wide variety of exposures that the business faces in particular.
For example, a good agent will explain how risks are often interrelated, and how these correlations must be identified and measured in order to mitigate them. As risks intermingle with different business activities, devising protection from them may necessitate an enterprise-wide approach, such that is often utilized in many companies today. An example of this would be how operational exposures such as fraud could in turn result in legal and reputational risks.
Metrics are a Manager’s Best Friend
For an effective program, one must measure it to manage it, as the old adage goes-meaning measurement and valuation are critical to informed decision making yet they can be some of the most difficult data to obtain accurately. If management takes the time and spends the money to acquire the skills sets and tools to reliably quantify information, it will pay off handsomely.
Times change, and so do the challenges that businesses face-so reassessments need to be ongoing for both current and forecasted scenarios. As market conditions improve or deteriorate, political and physical environments change, a company’s financial strength can wax or wane (and that of other organizations it relies on, say for materials or parts), each difference brings with it an element of danger in terms of a company’s well-being.
Risk management can be a daunting prospect when trying to go it alone. That’s why it’s best to work with an experienced professional insurance agent who knows how to properly analyze a business and all the things threatening its operations to establish a program that tames the marketplace and puts profitability solidly within reach.