How ‘Risky’ is your business
Posted on 22nd August 2016 at 14:30
For growing organisations, there are many ‘risks’ which every leader needs to be aware of such as Strategic, Compliance and Financial but one that seems to be last on the list is Operational. Operational risk refers to an unexpected failure in your organisation’s daily operations.
For growing organisations, there are many ‘risks’ which every leader needs to be aware of such as Strategic, Compliance and Financial but one that seems to be last on the list is Operational.
Operational risk refers to an unexpected failure in your organisation’s daily operations. It could typically be a technical failure or it could be caused by your people or processes. Or indeed any combination of these.
Operational risks can also be caused by events outside anyone’s control, such as a natural disaster (remember the floods!), roadworks outside your offices or even loss of internet connection. Anything that disrupts your company’s core operations comes under the category of Operational risk.
The events themselves can seem quite small compared with the other three mentioned at the start but operational risks can still have a big impact on your company.
When working with organisations at the smaller end of the SME scale (2+ employees) which have typically been set up and run by friends or relatives there is an inherent people risk and I always ask them a very straight forward question – ‘Do you know what each of you does?’ The response is normally
‘I think so!’
This air of doubt should be a cause for concern and if it is not clear and documented what each role and their responsibilities are within the organisation then this is a day to day operational risk.
For example – If there are three people in your organisation and one is responsible for the account management of your current customers, keeping them happy, if that person left or was ill for a long period would you know:
Who the main contact is
Are there any special pricing agreements in place
How often should they be contacted
Are there any special terms and conditions for them alone (as you may have agreed to win the business)?
What systems do they use to update the information (if one is in place) and do you have the right level of access to see it all?
It sounds so simple and you think its a ‘no brainer’ but quite often questions like this in smaller organisations are harder to answer as the main focus is delivering a service or a product to the customer.
I have created a post previsouly called ‘Be surprised at what you do’ which highlights the importance of spending time documenting how your business operates and the key information needed to ensure it runs as smoothly and efficiently as possible but what also needs highlighting are the risks to your business.
Once you have identified the risks you can then decide how you are going to manage them.
Spending time looking inward into your company rather than looking out is a very useful exercise for any business owner and it allows you to take stock of where you are and then refocus on where you want to go.
I write these article to make business owners take time and think about their business from the outside which is something more need to do.
Contact Green Giant Consulting today on 01159 648 218 or visit www.greengiantconsulting.co.uk to book your free initial consultation to help you be a less ‘Risky’ business.
Giant Consulting Ltd is part of the newly formed Business Support Alliance that can offer help and support for any area of your business.
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