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Risk has been part of our lives since we were kids. As adults in the business world, the perception of Risk is a very different scenario and being pro-active in risk assessment is critical to success. Greg Price offers tips to better assess and manage risk in your business.
Greg: This is Greg Price with PKF Texas’ Entrepreneur’s Playbook. From an early age, we’re taught to take a risk to get ahead. Risk helps us discover something new about ourselves, but at what point do we stop to examine how risky our behavior really is compared to its outcome?
The business environment isn’t much different. Successful professionals in today’s companies need to constantly analyze their place in the market, and fully understand, assess and plan for risks that can directly and indirectly impact their organization.
No one wants to spend money needlessly, especially in the current economic climate. However, can your business afford to have any surprises? Taking a “wait and see” approach could leave your business vulnerable to unforeseen issues.
An Enterprise Risk Management (ERM) initiative provides the greater likelihood of achieving a variety of objectives, fewer surprises and an improved understanding of all levels of risks in the business.
ERM is one of the critical components of a good corporate governance process established by company management and monitored by the Board of Directors.
There are many steps to a successful ERM, but these six major categories must be included in the project: 1.) Define and Select the Framework. 2.) Identify the Risks 3.) Assess the Risks 4.) Evaluate the Risks 5.) Address the Risks 6.) Monitor on a Continuous Basis
The goal is to get everyone in the organization to think about risk and how it is impacting, or may impact, the success of the project, process, business segment, corporate strategy or overall organization. Don’t wait until your business gets out of hand to implement your ERM and better manage your risks.
To read and comment on the PKF Texas’ Entrepreneur’s Playbook, visit my blog, fromgregshead.com. PKF Texas – The Fit That’s Right!
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