"Employees are often well aware of risks, but no one bothers to ask," says Ann Latham, president of Uncommon Clarity, Inc. (www.uncommonclarity.com), a consulting firm in Massachusetts. She goes on to explain that with so much pressure to meet deadlines and budgets, employees are actually discouraged from raising potential problems. "No one wants to be the one who sounds the alarm and stops the train ‘just in case.'" According to Latham, the solution is simple and revealing. "Ask the question, ‘What could go wrong?' And do it frequently, starting with your earliest plans."
Your Million Dollar Blind Spots™: Finding that opportunity to exploit or risk to manage by starting with truthful answers to the three questions below is the key says Gary W. Patterson, the FiscalDoctor® and enterprise risk management expert in Atlanta, GA.
- What are your top 3 concerns about meeting this year's objectives?
- What are 3 best long-term opportunities to make initiatives more valuable, which are not adequately funded in your budget, which you need to address before it is too late?
- What are your top 3 longer-term concerns for your organization's success?
"Risk is a huge, untapped opportunity for most companies because it is difficult to master," stresses David A Fields of the Ascendant Consortium in Connecticut. Ascendant's area of expertise is lowering risk and increasing ROI on consulting projects. "The very nature of risk makes it ambiguous and hard to get a handle on, which is uncomfortable for many executives."
Fields suggests a simple model for rapidly assessing the risk of any situation: Step 1 – Spend a few minutes brainstorming the downside and upside risks which could affect you or your goals. Step 2 – Quickly categorize the likelihood of each risk occurring as low, medium, or high, then rate the severity of impact using the same scale. Step 3 – Put aside all the risks except those that have high or medium likelihood and high severity of impact. Step 4 - Determine what you can do to reduce the likelihood of the risk occurring, what you can do to reduce the severity of impact and, importantly, whether the cost of those mitigation strategies exceeds the impact of the risk.
"Those four steps will help most people get a quick and dirty read on the risks they're facing," summarizes Fields. "However, understanding how to assign a market value to risk and how to reallocate that value in your favor is where you get into the fun and big profits gains."
"For virtually any business, big or small, nothing creates more anxiety than revenue risk," says Colleen Francis, founder and president of Engage Selling Solutions (www.EngageSelling.com), a North American-based sales consulting company.
"Are we going to make our numbers? What is the forecast upside? Or worse, the downside? No one likes surprises at the end of a quarter or year. Luckily, steps can be taken to reduce risk in sales and accurately predict revenue flow. When a disciplined pipeline process is applied to sales, risks can be identified quickly and mitigated so that sales targets are routinely achieved. It takes a rigorous review and mitigation process, but the results will speak for themselves."
Dr. Maynard Brusman is a San Francisco Bay Area consulting psychologist and executive coach and member of the Society of Industrial and Organizational Psychology. He is the president of Working Resources, a boutique strategic talent management consulting firm. www.workingresources.com
He offers a few insights:
"If your people continue to think and act as they do now, can you expect to achieve the results you need? If your answer is no, then changing your organizational culture is not an option—it's an imperative. NASA's 2003 Columbia Space Shuttle disaster is a tragic example of what happens when cultural norms fail. Six months after the shuttle disintegrated upon reentering Earth's atmosphere, killing all seven crew members, NASA investigators found that organizational culture had as much to do with the accident as the shuttle's damaged foam. The ultimate responsibility for the shuttle's failure fell on NASA executives who ignored, dismissed or minimized engineering experts' testimony."
Dr. Brusman notes, "As with NASA, leaders who ignore a disconnected culture risk failure and potentially tragic results. Research shows that the right culture champions high levels of performance and ethical behavior. When organizations design and support a culture that encourages outstanding individual and team contribution, they minimize risk and achieve improved bottom-line results. Creating a culture where employees are accountable and fully engaged is the driving force behind achieving great results."
Weiss concludes, "The phrase ‘risky business' is highly apt"
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