Over the next few weeks, we will be posting content with the theme “Rethinking Everything.” In light of COVID-19 and the new hurdles we face daily, we hope this helps as you revisit the way you operate your business!
Typically we spend time having companies think through risk before they launch and several times each year throughout the lifetime of the business. It was one thing to do a competitive analysis, which covers specific threats, it’s another to plan for things that could score a fatal blow to the company or put the business on the decline. The below link to the article “The Startup Entrepreneur’s Guide to Risk Management,” does a great job of outlining this from the nuisance risks, ignorable risks, insurable risks, and especially the company killers. I really like the fact that the article recommends organizing your company killers into a table that outlines what you are up against and what specifically you’re going to do about it. Creating this table for your firm is a good exercise we have businesses do to make sure they are thinking through the following things:
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Risk factor
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What type of risk is it?
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The likelihood it will happen
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The consequences as a result
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What are your mitigation tactics?
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What is it going to cost you to mitigate (time, money, resources, opportunity)?
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What is the current status of the situation?
Usually dealing with one critical risk is a handful and they can include: market, financial, technology and operational, competitive, people, legal and regulatory, and systemic risk. COVID-19 has exposed these risks with many businesses looking at all of these at the same time. Today it is a constant battle of prioritizing them on a daily basis to survive another day. Many times the day overwhelms us so much that we need a path to swim back to. This framework can help you and we suggest you use it. The obvious need today cannot blind side us to what is coming down the road.
We thought it was important to follow up to the initial message with a series of thoughts and tools that could help you during this time. Starting with risk was important because we must first know what we are up against comprehensively so we can see who is punching us. This will help as we begin the journey of adapting and reinvention. In today’s world, no business is mature and certain; all businesses are startups. The sooner we realize that, the better we can be. Everyday is a day of solving complex problems so let’s start bringing some structure and support to it.
Link: https://www.businessinsider.