Risky Business

Sometimes you have to risk it for the biscuit, but it helps to take calculated risks. Although having a healthy appetite for risk is an essential ingredient in business, some people bite off more than they can chew!

While these six types of business risk are common, you can effectively minimise and manage them with recognition and understanding.

  1. Values risk

The values that underpin your business play a big part in moving it forward and maintaining longevity, so it’s important to guard them carefully. Risk to values can take many forms — from the people you hire, to the clients you partner with. Adhering to your core values and principles in everything you do is essential and will influence how you’re perceived by others. Make sure your values are clear and consistent, so they’re easy for others to observe and follow.

  1. Capacity risk

Ensuring your business has capacity to take on projects, clients or orders is another big consideration. Understanding what you and your team are capable of requires a bird’s eye view of the business, which is often developed over time and through experience. By learning how to forecast the operational abilities of your business accurately, you’ll always be able to deliver on your promises, to the highest possible standard.

  1. Reputational risk

Sometimes reputation — whether your own, your team’s or your brand’s — can come into question, posing a risk to business. This can happen if you over-promise and under-deliver, if you get a bad review, if someone does something wrong, or if there’s a data breach or cyber attack. When it comes to personal reputation, maintain professional relationships and communication with employees, colleagues, clients and consumers, and be direct if someone crosses a line. In the case of data, there are lots of steps you can take to strength the protection of systems from the outset, including to passwords, infrastructure, applications, networks and clouds.

  1. Sensitivity risk

Different people can have different responses to the risks you take within your business. Some may be entrepreneurial and eager for expansion, while others may be risk-averse and focused on job security. Being aware of these factors and balancing them is important. By communicating the strategy behind your decision-making to your team, you can help everyone feel confident and assured.

  1. Investment risk

Foresight is critical to mitigating technology and investment risk. If you can’t anticipate the direction your business and markets are moving in, it’s best to steer clear of spending on something you’re unsure of. One common risk employers face is whether to invest in a larger team to increase capabilities. This isn’t a bad strategy necessarily, but it needs to be sustained by matched market demand for services or products. Before you dive right in, take time to consider what you’re investing in and why.

  1. Audience risk

Understanding the landscape in which your prospective or existing audience operates requires some strategic attention. It’s important to maintain excellent quality control, whether that applies to your products, your communication, or your service. Knowing what your audience wants and expects sets a standard for you to meet — minimising the chance of risk before it occurs.

While risk is a necessary feature of business, it pays to understand where you’re most likely to encounter it.

So, is your risk currently greater than your reward? Consult with our strategists today.

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