When you think of the term risk, what do you think about? Chances are, you have a negative connotation and think about ways things can go wrong. The reality is, when it comes to risk management services, anticipating what can go wrong is really only half of the equation. The world of risk management is complex, it is true, but it is also an absolutely crucial part of finding success in business. Here are a few things that the risk management experts do not want you to know:
- Risk can be bad, of course, but it can also be good. In fact, you might here other organizations or risk management specialists sometimes refer to risk as “opportunity”. The two are really pretty interchangeable, when you think about it. Risk is defined as the chance to lose or gain something of value, so that means that in every risk, there is the possibility for opportunity, and in every opportunity there is the possibility of risk. Understanding this and getting into this mindset will go a long way in changing your perception about what it means to manage risk.
- Risk is everywhere and no one is exempt from it. Everyone is exposed to risk and therefore everyone must learn how to manage it in some way. There are no companies or organizations that need it “less” than other companies or organizations. In fact, investing in enterprise risk management is one of the smartest and most useful ways a company or business can spend their money. If, for example, a company loses its office or factory in a natural disaster such as a hurricane or tornado, chances are that the money they spend trying to rebuild, restock, rehire and retrain, will far outweigh what it spent on risk management software like Ncontracts. If a company is lucky enough to never experience any kind of harm to their company, they are paying for peace of mind, which many business owners will tell you is invaluable.
- Risk is still risk, even when it is managed. The best way to think about risk is by using a gambling analogy. You may hear gamblers say that only with high risk can there be high reward. That may be true, but the reality is, sometimes low risk can reap a high reward too. Conversely, sometimes low risk will end up hurting a company as well. The point to management is not to ensure all risks are mitigated, but also to ensure that there is a plan in place for every possibility, whether that is a positive risk or a negative one. Regardless of what happens, a company will always be better off if they have plans ready to follow as soon as something happens, good or bad.
As you can see, your mindset around risk management is an important part of how you will approach risk within your company or organization. When you understand the nuances of risk and opportunity, you will be on your way to a more successful long term business.