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Nov 26
2012

Thinking About Risk

Posted by: Vicki Thomas in DRJ Blogs

Tagged in: Untagged 

Vicki Thomas

Most organizations and companies want to mitigate risk. Limit risk by making smart business decisions that enable the company to be on the leading-edge of their niche but still not in the "risk" danger zone. A fine line indeed. 

What is interesting is that so many executives, managers, team leaders, and boards of directors often tend to overlook all facets of risk. The one type of risk that most folks are focused on is financial risk: what impact on the bottom line will the decision, new product, or switch in focus have?

Obviously it is important to consider financial risk when it comes to corporate longevity. But what about:

  • Operational risk
  • Legal and regulatory risk
  • Natural risk
  • People risk

That's right - there is more to business success than the bank balance. When looking at the big picture of how you need to protect your company and ensure it is ready for all elements of risk - these dimensions cannot be overlooked. In fact they should be front and center in your disaster recovery and business continuity planning. 

Operational Risk

How ready is your business for interruptions to its systems? For example, what happens if one of your key servers stops functioning - can you still fulfill customer orders and deliver your services?

Legal and Regulatory Risk

It is vital that your organization be aware of and comply to the latest regulations regarding business preparedness. How well is your company protected in the event that you cannot deliver products, services, and meet third-party commitments?

Natural Risk

This is a big one and the recent events in New York and New Jersey should drive home how important it is to be ready for natural disasters. Flood insurance. Fire insurance. Back-up data centres and remote-working systems for employees. All of these go a long way in ensuring natural hazards do not become disasters for your organization.

People Risk

How well are you looking after your team? Do you know if your key employees are happy, are looking for new work, or are simply going through the motions from 9-5. The strength and success of your company depends on your people. Good people make the difference. How well are you prepared if one of your key executives, developers, or team leaders leave the company?

As you can see, risk and understanding how it can really impact all dimensions of your company is essential in your company's success. It is easy to overlook these aspects when doing business planning - but if you're doing an effective job of creating and maintaining your disaster recovery and business continuity plans - you will be aware of these risks.