Leadership is a deft balancing act – of maximising gains while minimising losses – so it’s essential to have a deep understanding of the risks facing the organisation, whether that’s traffic accidents, tsunamis or suppliers going bust. Indeed, while leaders are generally aware of their financial challenges, many are less familiar with these operational risks, the ones that are part and parcel of simply getting the job done.
5 ways to be more risk-aware:
1. Log it
Hardly rocket science, perhaps, but the first step towards being risk-aware is to systematically list all your departments, activities, processes and stakeholders – and then identify every spanner that could potentially jam itself in the works. Operational risk management (ORM) is built on logging the likelihood of each such event, how often it may occur, and the severity of the consequences if it did. Only once you’ve got this basic level of awareness can you go about setting up all the juicy stuff – like your teams’ performance metrics and KPIs, risk priorities, and resource allocation.