Every organization is at risk. If you do not pay enough attention to risk management, your organization is open to possible damages or loss. Even more important quality certificates could be repealed or punishment and fines can be imposed. Therefore, the chance of risks should be reduced as much as possible or even be avoided.
Types of risks with Risk management
There are several types of risks:
Internal risks occur through information supply, quality control, (strategic) goals, or complex regulations.
External risks come from authorities outside of the organization, which impose certain quality norms and demands on products and services. Furthermore, organizations need to comply with law regulations. Another relatively new demand for entrepreneurs in the Netherlands is the MVO, which states that every undertaking needs to be socially responsible.
All of the above are risks for entrepreneurs, which can lead to missing out on orders or even worse: a damaged public image.
Reduce, or even better, avoid danger!
Because risks can lead to undesirable outcomes for the organization, these need to be avoided as much as possible. It sounds simple, but how do you do it?
Chart the business operations. First you need to create a clear image of the current business model of the organization. If you skip this step, it is possible that certain bottlenecks and risks will be overlooked. This important step is the basis and accomplished by visualizing the company processes in the form of a blueprint of the organization.
Perform a risk analysis. Subsequently an analysis should be made of all the risks (internal as well as external risks). All of them will be categorized using two factors: ‘chance’ and ‘damage’. The first variable indicates the chance that a risk will actually occur. The second variable is the amount of damage that a risk will have as a consequence once it occurs.
Develop and implement control measures. Management and the employees assess the dangers based on the risk analysis from step 2. Which risks are acceptable and which require preventive measures? The result is that you can decide with which priorities, activities and costs the risks can be reduced to the necessary control-level. These measures are recorded in the process and the work instructions, and through training, evaluation and repetition is embedded in the behavior of people and the functioning of systems. With Comm’ant you become in charge of the organizational risks.