Most every business at one time or another, most often annually, spends a bit of time on a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). This is simply good governance. And, as I discussed in a recent post, Are You Prepared to Govern in a Changing World?, successful companies focus externally on the O and the T, because they know internal actions must be based on these.
An often missed corollary to SWOT, is the broad topic of Risk Management. Business owners sometimes believe that by purchasing insurance they have addressed this topic.
While insurance is available to mitigate some risks, there are many business risks for which insurance is neither available nor financially practical. Instead, it is management practices that are the key ingredient to managing many, if not most, risks.
How are you, as a leader, managing each of these?
- Does the behavior of your employees reflect your company values?
- Have you articulated these values and do your own actions consistently reflect them?
- What do you want to be known for? (your brand)
- If you surveyed customers, vendors and others who have contact with representatives of your company, what would they say you are known for?
- Simply put, does your product and service work?
- Do you have quality standards, and do you measure them?
- Is it easy to do business with you?
- In short, do you have operational excellence and if you don’t, is doing something about it a priority?
- Are you keeping current on HR and other regulations that impact your business?
- What actions are you taking in your hiring, promotion and other business practices that may inadvertently create legal risk?
- Are you focused on retaining your key employees?
- Do you deal effectively and swiftly with behaviors that are not consistent with your culture?
- What is happening in the marketplace (competitors, regulators and customers, etc.) that may impact your business model?
- Is your business model sustainable? How do you know this?
- What have you done, or need to do, to diversify this risk?