Is Your Company at Risk?
What is the challenge every company’s CEO and his or her executive management faces, yet frequently fails to understand? It is called Risk. Every decision made, every business process implemented, every procedure followed involves some element of risk. Extensive academic training is acquired by executive management to run their companies. Yet, when it comes to risk based thinking and management, that side of the equation is most often ignored or misunderstood. Why is that?
Risk can impact any industry. In 2005-2007, there were 65,000 automotive companies and suppliers in the U.S. In 2016, there are just 6,500 automotive companies and suppliers in the U.S. How could Risk have been managed to create a better outcome? How could understanding Risk have better assisted executive management in achieving a more positive result?
Historically, quality management has been given the lead on identifying risk, and on occasion managing risk. Quality management was more likely to focus on prevention. With the new revisions to ISO standards recently, risk based thinking and management is replacing prevention as a primary focus.
The CEO, including his/her executive management team, which also includes quality management, is now responsible like ALL for risk management.
The most common types of risk management implemented in business may include avoidance, mitigation or reduction, transfer, and acceptance. Not familiar with these terms? You should.
Unfamiliar with risk based thinking and management? Maybe it’s time for your management team to take a refresher. Your company will be glad you did.