Risk Therapy 104

In the article Risk Therapy 101, we explored reasons why Risk Management is seen as a business imperative by CEO’s and yet it rarely translates to effective activity. In Risk Therapy 102 we considered behavioural options. Risk Therapy 103 addressed motivational issues.

Article 104 is a (present) reality-check, which includes a review of (past) habitual responses and preferred (future) choices. It reaffirms what you already know, that you can make changes today, rather than just manage the changes that happen to you, that originate elsewhere.

Let’s not forget, risk is personal; as is opportunity. These are concepts that happen in real life, not just in business school books. Will you choose to prepare for them or just react when you are forced to?

Both will manifest themselves in your life when you least expect them. They are likely to come from a place that you least anticipate. Alternatively, you can go looking for them; shall we say you adopt them rather than the other way around? Your approach to your life, like your behaviour in business is your choice.

Choices, like risks and opportunities, are personal too; your responses become good or bad habits. Studies indicate that habits can be broken or made in 21 days, so you need not be a prisoner of your past.

What does all this have to do with Risk and Opportunity Management? Well choosing to adopt these behaviours is a life choice. This choice is optional at the moment, but not for much longer. The new Companies Act requires practice of Risk Management as a new minimum standard for business in SA.

If you would like to discuss this subject further then contact us. This is one of our areas of expertise.

If you are looking for a more discrete initial step then you can take the Enterprise-wide Risk Health Check (RHC), accessible from our website by arrangement with us. It is a self-check system that allows you to quickly ascertain the Risk Health of any sized business, in any industry, in any country.

In two hours, you can privately discover strengths and weaknesses in existing Risk Management structures or procedures, inherent strategic issues, problems and opportunities in your areas of expertise, key dependencies and some specialised risk identification.

What are ART and Risk Therapy about? The emphasis is on the individuals in the business to take responsibility for their position and the development of it.

Accountability cannot to be abdicated to a juristic entity. You can walk away when things get tough, or you can learn from it. Think of it as self-development.

You need not face this alone; we are there to help you.

For more information go to http://www.artrisk.co.za or ART Risk Health. Write to us at paulb@artrisk.co.za or paulb@pobox.co.uk or paulb@artrhc.com .

This is the fourth in a series of articles. Further exploration of this new mindset will follow in Risk Therapy 105.

Risk Therapy 103

In the article Risk Therapy 101, we explored the reasons why Risk Management is seen as a business imperative by CEO’s and yet it rarely translates to effective activity within many operations. In Risk Therapy 102 we consider ways to address the gap. Risk Therapy 103 is about motivation; why bother, really?

You’ve heard of the 80 /20 and 90 /10 principles, well these apply to the characteristics of businesses as well as people. We are familiar with statistics which recognise that many businesses fail in the first two years of operation. There are many reasons and usually it is a combination of factors. So why is failure so prevalent? Why can’t you dodge the bullet?

Well you stand a better chance of doing so if you just step back once in a while and take a look at the big picture. New business owners and operators are usually preoccupied and excited by the business and its potential, often blinding them to the realities of their true situation. Insufficient attention is given to initial and ongoing strategic positional analysis. You can miss both the good and the bad elements within your business environment.

Here are a few very simple guidelines:

1. 
   Breakdown composite results into their components. Remember, a bottom line is just that, the result of many inputs.
2. If you’re looking for reasons for something but have more than one explanation from your stakeholders, then use the concept embodied in Occam’s razor; the simplest explanation is most likely to be true. That’s the problem or opportunity to address.
3. Good and bad events will happen, but are not just beginnings or ends in themselves. They are learning opportunities though, which must be taken or lost.
4. Businesses do not have to fail. Their resilience and risk health is a choice.
   
   If you are uncomfortable using Risk Management concepts to analyse your position, think of it as Performance Management. It doesn’t matter what you call it, it does matter that you do it regularly, at least once a year.
   
   If you get stuck with any of this, call us. This is our area of expertise. Sometimes it is more effective to have the benefit of an external perspective on a given situation anyway. If you are looking for a more discrete initial step then you can take the Risk Health check accessible from our website by arrangement with us.
   
   Our team of specialists has created a self-check system that allows you to quickly assess the Risk Health of any sized business, in any industry, in any country. In two hours, you can privately identify strengths and weaknesses in existing Risk Management structures or procedures, inherent strategic issues, problems and opportunities in your areas of expertise, key dependencies and some specialised risk identification.
   
   What is new about ART and Risk Therapy? It is the emphasis on the individuals in the business to take responsibility for their position and the development of it. Accountability cannot to be abdicated to some non-existent or mythical juristic entity. You can walk away when things get tough, or you can learn from it. Think of it as extended self development.
   
   For more information go to http://www.artrisk.co.za or visit our new Risk Therapy Website or write to me at paulb@artrisk.co.za
   This is the third in a series of articles. Further exploration of this new mindset will follow in Risk Therapy 104.

Risk Therapy 102

In the article Risk Therapy 101, we explored the reasons why Risk Management is seen as a business imperative in higher circles and yet it rarely translates to effective activity within many operations. In Risk Therapy 102 we consider ways to address the gap.
Firstly, let’s identify those who (reportedly) take the subject seriously, whether or not they actually manage their risks effectively:

1. Business leaders
2. Shareholders
3. Insurers
4. Brokers
5. Reinsurers
6. Government
7. Regulators
8. Auditors
9. Risk Managers
10. Bankers
11. Engineers
12. Manufacturers of high risk products
13. Business entities offering high risk services
14. Businesses prone to litigiousness
15. Nuclear technologists
16. Space technologists
17. Deep water technologists
18. Disease / bio-hazard technologists
19. Anyone who trades with their own name

I may have missed some categories, but do you see yourself or your business on the list? How does everyone else take the first step towards effective Risk Management then, after denial that is?

The initial answer is still, an internal choice and commitment. First prize is still to consult with external professionals.

Since writing Risk Therapy 101, we have created a discrete self-check system that allows you to quickly assess the Risk Health of any sized business, in any industry, in any country. In two hours, you can privately identify strengths and weaknesses in Risk Management structures or procedures, inherent strategic issues, problems and opportunities in your areas of expertise, key dependencies and some specialised risk identification.

System output is both graphic and written. It can and should be audited. Thereafter, it can be presented to the Board of Directors for their consideration and approval. Of course, you may find that you still need more help, but at least you will know the Risk Condition of your business, from an independent perspective, without have to reveal this information externally.

For more information go to http://www.artrisk.co.za/ or our new Risk Therapy Website This is the second in a series of articles. Further exploration of this new mindset will follow in Risk Therapy 103.

Risk Therapy 101

Risk Therapy is a new concept, which adds to those of established Risk Management practices, rather than replacing any (also read Risk Management as internal / external change management).

Why consider it? Well Risk Management can be most charitably described as dry and costly, even though it was agreed as a sound business principle and encapsulated in the King II Commission Report published 26/3/2002. So it’s about as exciting as going to the dentist and, everyone has to go to make it work. Therein lies the initial stumbling block to effective implementation, nobody wants to go there, certainly not everyday!

Ironically, we practice Risk Management in our daily lives, although this is mostly informal and often unconscious. So what are the stumbling blocks to extend such formal practices to the work environment? I suspect this is due to a combination of the following factors:

1. Ignorance (risk what?)
2. Arrogance (it will never happen to us)
3. Laziness (do we have to write / follow up on yet another report?)
4. Naiveté (we have covered all the possibilities)
5. Stress (we forgot in the rush)
6. Heavy work loads (we haven’t got time)
7. Abdication (that’s someone else’s job)
8. Irresponsibility (we don’t really need to do that)
9. Informality (we have a system buts it’s all in my head)
10. Unrealistic (but we’ve done it this way for years; nothing ever changes!)
11. Short-cuts (its too much effort)
12. Penny-pinching (it costs too much / doesn’t add value)
13. Reluctance (the boss wants me to do it)
14. Flippancy (we’ll manage any problems as we go)
15. Cowboys (if it goes wrong we’ll just start again somewhere else)
    

So what can be done to address one of the most highly-ranked fears of business leaders? The answer, an internal choice followed by a commitment.

The choice is to consult with external professionals. Anyone will do, but remember, experience and attitude counts for a lot. As with any therapy, it requires consultation with a person or organisation external to the person or organisation seeking it, whether or not you believe you need to. So this could lead to a simple reality-check of systems, standards, penetration, attitudes and delivery, or as radical as the creation of a complete Risk Management system.

For it to work, commitment to this voyage of discovery has to be made, irrespective of the consequences. In other words, choose to heal yourself and follow it through to its natural destination.

Are you and your teams ready for this? We can help you with this fresh approach. For more information go to our specialised Risk Therapy website or http://www.artrisk.co.za/

This is the first in a series of articles. Further exploration of this new mindset will follow soon in Risk Therapy 102.