Employing risk management in your company or organization is important. Everyone employs some kind of risk management in the company over time, as they develop ways and processes to make sure that things don't go out of plan.
For any effective risk management program, identifying risk is vital. By identifying risks, companies can take steps to mitigate those risks before they turn into actual problems for the company. However, identifying risks isn't as easy as it sounds because risks can come from multiple sources and take various forms.
Therefore, it is important that you know how to identify risks in your company. For this purpose, we will discuss some ways that can help you identify risks in your company.
The first step in identifying risks in your company is to conduct a risk assessment. Conducting risk assessment can help you identify potential risks, evaluate their likelihood of occurrence, impact, and how to mitigate them.
To conduct a risk assessment in your company, you can employ various methods, such as taking surveys and interviews, arranging workshops, etc. In addition, you can also analyze the past incidents that have happened in your company and review your company policies to identify potential areas of weakness in your company.
While assessing risks in your company, it is important for you to be pessimistic for a while and think about what is the worst thing that could happen to your company in case everything goes wrong. While you cannot run a successful business by being overly pessimistic, you can, however, identify risks.
During the process of risk identification, it is important to avoid being overconfident and thinking that something can't or won't happen. Make all possible assumptions about potential risks and be prepared for any risk that might turn into a problem.
Performing internal research is another way to identify risks across your company. Whether you are running a physical business or an online business like , conducting internal research can be of so much benefit. Just with simple observation, you may be able to recognize the weaknesses and areas in your company where things aren't being done correctly.
By performing internal research, you can identify the root causes of mishaps in your company, which can be then addressed by yourself or your risk management team.
Conducting external research is as important as conducting internal research. Whether your company is a virtual one like or a physical one, it belongs to some industry and each industry has its own unique trends and common occurrences. Unless your company is in a brand new industry, you can learn a lot about identifying risk from those who are already in the industry for a long while.
In addition, you can also take aid from professional risk management organizations because they are experts in risk management and will provide expert insights on risks that can be typically found in a company similar to yours. They also provide you with the latest industry trends, occurrences, and research reports that will highlight common risks in the industry.
Your employees, from senior leadership to the latest recruitment, are the first line of defense against potential risks. Everyone will come across several risks while performing their job and they will be able to identify those potential risks much more easily compared to the management.
All employees in your company will have some insights into the risks they encounter on a daily basis that are not evident to the management. Therefore, all employees, from top to bottom, should be encouraged to report any potential risk that they come across, even if they think that it is minor.
Moreover, employees should also be encouraged to provide regular feedback. If employees are reluctant to speak up, you can allow anonymous feedback or seek feedback in a group setting to make them more comfortable.
Just as helpful as it can be to ask your employees, asking customers can also help in risk identification. If multiple customers complain about the same thing, product, service, or process, it is more likely that there is a potential risk associated with that thing. Therefore, take customer feedback seriously and analyze how often customers complain and what they are complaining about the most. This will help you identify and mitigate potential risks.
If you are doing everything else, why not take the help of technology? You can use technology to identify potential risks and address them before they become a problem. For instance, there are various data analytic tools available in the market that can be used to identify patterns and anomalies in data, which help to identify potential risks.