For many the term risk = unwanted or bad; right up there with its more famous 4-letter word cousins. It’s understandable. Oil spills, meltdowns, bankruptcies, corporate scandals and economic collapse have become everyday discussion items. Joined to these topics is the generally held belief that failure and catastrophe are the result of a business, organization or government’s inability to manage their risks.
On many levels that’s true. But the answer is not as simple as removing all risks and everything will get better. In today’s markets, where costs, growth, innovation, customer demand and public perception rule, taking risks is critical for success. The truth is that an appropriate amount of risk is positive, even vital for business growth. Taking risks is part of any successful enterprise.
The goal should not be to remove all of the business risks. The goal should be to ensure you know your true risks and that you have a robust way to manage them, while achieving your goals as a company. Let’s put that another way… the goal is to figure out how risk impacts your organizations strategy for success. Good risks in, bad risks out…
For Risk to lose its 4-letter word status, enterprises are going to have to start doing a better job managing it.