Risk management: Be prepared for the future

Written by Eva Normell, at Purple Ivy AB


Get ready for the future with a little help from Maja Angelou

Maja Angelou was a very wise woman. She once said that she spent her life “Hoping for the best, prepared for the worst, and unsurprised by anything in between.” Talk about a quote that can carry us through these strange times!

That brings me to the subject of risk. Hand on your heart: Were you caught ‘unsurprised’ by this Covid tsunami? Were you one of the lucky ones to be prepared for its fast-evolving implications?

When your company did its latest risk assessment, how did you rate the risk of a pandemic?  It’s likely that a pandemic ended up on the ‘low probability’-‘high risk’ quadrant of your risk heat map.

Creating do-able plans are an integral part of completing risk assessments and shaping logical scenarios. Plan A could be ‘business as usual’ scenario and have sharp focus on the red-hot risks on your map that you want to prevent. Plan B could have a few tweaks to plan A. C, on the other hand, would describe ‘business unusual’ scenario and address the right-hand column of your risk heat map.

As I write these lines, a lot of people are working hard on developing a doable plan for Scenario C for their companies.  They are playing catch up either because:

  • Covid-19 was one of those risks that was so low on probability that companies had not bothered to prepare a business continuity plan supporting this event.

Or 

  • The company didn’t even capture that risk in their risk assessment and are now wondering why not.

Or 

  • The company never regarded proactive, strategic risk management as necessary.

Either way, it is no easy task to play catch up and get alignment with your team on a Plan C in these extenuating circumstances.

Can you dare to ignore risks? 

Risk management is crucial to business continuity. If the company doesn’t dare take risks, its business will stagnate. But if it takes risks without understanding their potential consequences, it could end up in a situation where it loses the confidence of its customers, employees, partners and other stakeholders.  Some risks have a huge potential consequence for the business if they were to happen, At the same time, they’re deemed unlikely to occur. Should companies have a plan for these? Hindsight is 20/20.

Risk management as a proactive tool

Risk management is the most efficient tool companies can use to work proactively. The more fast-moving and future-gazing the company is, the more benefit they will gain from it. Because it provides clear and straightforward support for decision making, it makes it easier to say no if they have to and gives a rational motivation to back up the decision.

Using the outcome

A risk assessment gives companies a proactive approach to getting the right prioritization for realizing a strategy. At the same time, the process highlights those risks that might be a showstopper and that companies need to prepare for with a continuity plan – Plan C . The result can be input to forward gazing plans for success and continuity plans for survival.

The process consists of six steps: setting the scope, identifying risks, prioritizing based on consequence and probability, control, following up and starting over.

Continuity management

Business continuity planning creates systems for prevention and recovery to deal with potential threats to a company. In addition to prevention, the goal is to enable ongoing operations before and during execution of disaster recovery. 

They say that it is common sense and I agree, it is sensible but not always common.

Are you reevaluating your approach to risk? Contact us to get support and improve your management or continuity management processes.


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