Some business owners think it’s much better in this position – it’s dark and quiet and nothing can disturb me. I am safe, the lion or hyena can’t get me here.
There are risks in everything we do from the moment we get out of bed until the moment we are back in it. It’s just life. But we ignore them at our peril.
Is there ostrich avoidance behaviour in your business?
In business terms, these risks are threats to achieving strategic goals and targets and even to the survival of the organisation as a whole. They won’t go away by burying one’s head in the sand.
“We are in business, risk goes with the territory, we are entrepreneurs, we accept risk, that’s just how it is”. We’ll keep our head in the sand.
Alternatively, it is possible to identify the risks, understand their potential impact, assess their probability and choose which ones to mitigate and which ones to accept. Changing the mode of operation and insurance are some mitigation tactics. Some risks will not be possible to mitigate fully and we can choose “eyes wide open” to accept them or avoid exposure to the particular activity altogether.
It’s the old adage “hope for the best but plan for the worst”.
A useful visual tool that we like to use with our clients is a risk/probability graph plotting the impact of a particular situation against the probability of it arising. Anything in the top right has a high business impact and a high probability of occurring. Most businesses don’t want exposure to those!
Using this tool, plans can then be made and enacted to reduce unacceptable risks.
Of course, shutting one’s eyes and hoping for the best might still work. But is it worth the risk?