How was your week?
So we will continue where we left of last week.
We were considering how Risk affects a business...we also said that risk wasn't always a negative thing (yes risk can be very good for business)
We are looking at ways to handle risk when it comes to using it as a tool to generate better business results.
So we mentioned that there are 2 broad ways risks can be handled. When we have a negative risk (also called threats) we handle them by using any of 3 techniques...
Accept, Transfer, Mitigate
To transfer risk is to give to risk to another entity or business. This concept is best explained with buying insurance. What we do when we purchase Insurance is that we transfer our risk to another business....please consider this for a minute....risk is the foundation of an industry called insurance that deals in billions of dollars worldwide...
Transferring risk shields you and your organization from the threat that a risk possesses.
I must mention that transferring a risk doesn't necessarily make you immune to the risk, what it does is that is shields you directly from the impact of such a risk.
The 3rd response to a negative risk is
Mitigation is a proactive strategy designed in case a risk event occurs.
This means that the risk should have been anticipated and a strategy decided in case the risk event occurs. What I have learnt about performing brainstorming sessions to predict risk events and also to design responses is that it prepares an organization for any scenario.
This preparation helps the organization not just in event of any such risk events, but gives the organization a strategy for survival. This idea is vital to long term success. I have since learnt that in business the only guarantee of success is a decision to succeed. A determination never to go back, look back or think back....
Businesses need to expect the best but prepare for the worst...
Please have your say...
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