Risk Analysis For Your Business
Why wouldn't you do it?
POSTED BY ELLEN WILLOUGHBY ON 15/10/2020 @ 8:00AM
This week, I hand over to my colleague Helen Bell again who offers some good solid advice on why all businesses should be doing risk analysis ...
There are many ways you can perform a risk analysis for your business!
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If you think about it, risk analysis is part of everyday life, so why wouldn't you do it for your business? I mean, you wouldn't go for a walk outside without checking the weather and seeing if you needed a waterproof or an umbrella, would you?
Risk Analysis in business is not that different, and it can help to determine what your internal and external risks and blind spots are alongside the opportunities that you need to seek out to remain successful.
If you are ISO9001 certified, or if you are looking to attain ISO9001 certification, you will know that one of the major changes in 2015 was to provide more risk-based thinking and ensure that risks and opportunities were captured and actioned. More importantly, it looks for evidence that risks are being reduced and opportunities are being enlarged.
"How do you determine your risks and opportunities?"
Your risks and opportunities need to be determined in the context of the organisation, both external and internal. These might be environmental, social, economic, legislative or political factors that could potentially affect the business externally along with the internal factors such as resource, investment and capability.
You must also consider interested parties in your business and the risks and opportunities associated with them - for example - you want to ensure that you provide good quality for your customers - with that comes the opportunity of business continuity and growth, the risk of poor quality however comes with the potential loss of business and even reputation.
There are many ways to capture your risks and opportunities, one of the most effective ways is to create a simple SWOT analysis. This is ideal for consolidating your Strengths, Weaknesses, Opportunities and Threats. This can then be turned into an action plan to build upon the strengths and opportunities and to understand and action the areas of weakness. When it comes to threats, you are able to look at what mitigation you can put in place to reduce your chances of being susceptible.
My preference is to use STEEPLE analysis as it is an all-encompassing tool that looks at everything including the macro-economic factors that affect a business. Boiled down to simple terms you look at the following - Social, Technological, Economic, Environmental, Political, Legal and Ethical factors affecting your business. Some people will argue that this is a tool is best placed for reviewing external factors, however I would counter that this also allows you to look at your surroundings and how it affects your internal risks and opportunities also.
"What can you do about it?"
Once you understand your risks and opportunities you can start to mitigate the one and grow the other. You may never be able to mitigate against all risk, sometimes, you just need to accept it and move on as long as you understand the potential impact and whether it has far reaching or unaffordable effects.
Similarly, you must pursue all of your identified opportunities and ensure that you build on your strengths as in this cycle of continuous improvement lies the heart of business continuity and growth.
From time to time, you may also find that a potential opportunity is fraught with risk and here you need to stop and consider how you would handle this - do you approach, understanding the risks and how to tackle them, or do you avoid and play it safe?
One thing is for sure, there is no crystal ball with which you can accurately predict the future, the best way to prepare for what may come your way is to understand the risks and opportunities that you can see, and to plan sufficiently that you predict and avoid the blind spots.
That way the foundations can be laid, and your business can survive and even thrive.
Until next time ...
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A huge thank you to my colleague Helen Bell for this week's blog post!
If you want to learn more about risk analysis for your business, why not talk to us? Call us on 01164 422546, leave a comment below or click here to ping over an email and let's see how we can help.
About Ellen Willoughby ...
I'm Ellen, Director of All About Quality and All About Productivity. I have over 20 years experience as professional in the quality world and 17 years as a practising Buddhist. As a result of this, I have a passion for improvement. in both business and personal life.
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