What is Risk Management and How Does it Affect Growth
Predicting the challenges your startup will face when you scale is integral to any business, and we first need to ask the following question: “what is risk management?”. It highlights potential flaws in your organization’s strategy and, by identifying obstacles before you encounter them and creating viable strategies that enable you to overcome them, can help you prepare for the future. In this vein, you learn to preemptively make corrections, thus changing the trajectory of your growth. There are five main areas to look for threats to your company, all giving plenty of room to chart a different course. These are: technology, disruption, market, financial, and people.
Structuring an organization is a process best built on well-laid plans, and though counterintuitive, pruning the tree is what will lead to a greater flourishing. By cutting what consumes too many resources, you make way for a more efficient operational value and can focus on that which drives the most commerce. Investigating the riskiest areas of your process is a good way to inform these high-impact decisions.
Some risks will overlap, and it is important to know this ahead of time. Management can coincide with technology just as personnel can affect funding and other financial overhead. In this way, your vested interest lies in viewing your corporation as a cohesive whole that also has its distinct, yet interconnected, parts.
Your investigation will involve assigning a value of importance to each sector you wish to examine, or a score weighed as a percentage point. You would then give a confidence factor to each of these various elements. Fidelman and Co. can provide valuable assistance with this, lending their expertise and oversight to guide your decision making. You will also need to give a description to the progress you have made or still need to make in each category, providing you with a wealth of information.
If, for example, your systems are not finished in the area of technology, this will drive your action steps to fix the outcome. If the market in which you find yourself is not competitive, you can address the components that make up the lack or overabundance of competition. It is then possible to investigate whether the products or services you offer are perfectly matched up for the area in which you wish to do business.
Your risk management assessment is specifically tailored to the unique characteristics of your firm and the people with whom you wish to engage. Your company culture will also be a factor in your ability to reach out and make a connection with clientele, and your growth is impacted by this to a large degree, as it colors every interaction.
Financials will be inspected from top to bottom to look for any areas that may hinder your success, giving you a bird’s-eye-view of problems before they arise. Your relationships also need to be stewarded in a way that reflects your company’s desires for the impact you wish to have in the community, fostering positive values and a clear objective. Your initial valuation will also be estimated at this point, giving you a reference point for any improvement in this area in the future and also a target for which you may want to aim along with a suitable deadline.
Risk management is a tremendous undertaking but is also one that will prove invaluable to any corporation by helping set the stage for intentionality in achieving goals and by giving the necessary insight with which to plan steps to diligently achieve that end.