The Downside of Upside

The economic downturn has presented its share of challenges for business around the world. Adjusting to the “new economic normal” hasn’t been an easy task as the broad scope of operational changes, closures and bailouts have shown. It’s been a trying time for business, but positive signs of change are beginning to emerge; strategies are being aimed at making the most of the upturn, investments are leading economic activity and strategists are identifying early increases in consumer confidence.

Edging out of the recession and seeing better economic conditions around the corner, it’s important that businesses be aware of the downside of the upside of risk!

It’s common to view risk negatively, but every entrepreneur knows that there is no reward without risk. Risk brings opportunity and is the balance between the upside and the downside. There are many changes that will come with a global economy that is on the upswing; credit will become more widely available, businesses will begin to prosper and begin hiring, business spending restrictions will ease, investments will be made in infrastructure and companies will look for ambitious growth.

As discussed in one of our blog posts from last year, the downturn has been a time for improving operations, strengthening relationships with customers and preparing to make the most of the recovery. Now that the upswing is upon us, bringing positive change and room for growth, it’s important to plan for the risks that will no doubt accompany the opportunities presented. In the upturn of the economic recession, make sure you don’t become your own worst enemy.

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Social Media Policy: Avoiding a Death-Blow!

A company’s reputation is its biggest asset! Successful companies have always guarded their reputations at all costs. Corporate communications have always been very structured and deliberate and the messaging meticulously controlled by dedicated professional spokespersons. That was before blogging, Twitter, Facebook and all the other new social media that gives all of your employees and customers a soapbox and a bullhorn with a global audience!

You’d be hard pressed to find someone these days who can argue against the impact that social media has had on the way that we conduct business. From customer support and advertising to internal controls and knowledge sharing, social media has changed the way we work and has changed the expectations of customers.

As we try to better understand how to use social media to our advantage, it’s important to consider managing the associated risks. We need to ensure that employees know the Dos and Don’ts and the potential impact on the company and them of going “off script”.
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Strategic Risk as an Element of Operational Risk

Tom Cooper is currently an Assistant Professor at Memorial University in the area of strategic management. As a member of ClearRisk Board of Advisors, Tom’s research and blogging focuses primarily on the interplay between strategy, risk and compliance as well as their effects on corporate responsibility. ‘Strategic Risk as an Element of Operational Risk’ is the fourth in this ongoing series.

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How Stress Can Hurt Your Business

While it may not always be at the forefront of our thinking on risk management, work-related stress can be extremely costly if not properly monitored and controlled. As with most risk management activities, being proactive is not only better for your employees, but it’s also better for your bottom line. Being proactive costs a lot less than being reactive.

What are the costs associated with employee stress?

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Office Holiday Parties and Liquor Liability

It’s that time of year again. The shopping days are counting down, decorations are going up, and holiday gatherings are starting to fill the calendar.

Hosting holiday celebrations for your employees can be a great way to come together, to show appreciation for their contribution throughout the year, and to unwind and celebrate the holidays. But it is important as an employer to minimize the risks associated with consuming alcohol at holiday get-togethers.

Employers in many jurisdictions have been held liable for damages resulting from employee intoxication at a company event. To prevent losses and to limit liability related to alcohol consumption at work-related events, employers should implement an Alcohol Policy.

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Aon Identifies Top Three Risks in the Retail Industry

Aon recently released a report that outlined the top three risks identified by the retail industry. The report found that these top three risks were also in the list of top ten risks that the retail industry was the least prepared to face.

These risks are of concern to the retail industry because of three characteristics; their complexity, their difficulty to control, and their enterprise-wise affect and scope.

What are the top three risks?

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Supply Chain Risk Management: Balancing Flexibility and Vulnerability

Supply chain management is largely about interconnectedness. When planning for and managing the sourcing, procurement, conversion and logistics related to your product offering, companies need to create the right relationships with the right companies. This will help to optimize the movement and storage of materials and inventory while at the same time preparing for disruptions. Striking the right balance is not easy.

If you stretch your supply chain too thin, you subject it to vulnerability and leave room for disruption in your operations. If you don’t actively seek ways to improve your supply chain and its processes, you’re missing out on the ability to make related operations run more effectively and efficiently.

Globalization and new market realities that allow just-in-time manufacturing, outsourcing and lean manufacturing have further complicated supply chain management. While it brings great opportunity to companies big and small, it also brings considerable risk. If you do it right, a flexible and optimized supply chain can not only free up resources within the organization, but it can also decrease the cost of goods and increase the number of markets that you can occupy. However, mismanage your supply chain, and a disruption can decrease revenue and market share, and can increase costs considerably.

When one of the links in the chain fails, what do you do?

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Are You Managing the Right Risks?

Risk management planning can be such a huge investment for a small to medium-sized organization. It is crucial to ensure that your risk management dollars are going to good use by making sure that you are managing the right risks – those that present the most severe consequences or that hold the highest likelihood of occurence.

How do we make sure we’re managing the right risks?

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An Ounce of Prevention: Does Risk Management Really Work?

An ounce of prevention is worth a pound of cure! I wonder what risk analytics software they ran to come up with that ratio?  For thousands of years human experience has evolved to the point where we have become genetically programmed to know this. Yet we consistently ignore it! Dan Gardner‘s book “Risk: The Science and Politics of Fear” addresses this paradox extensively. Why, if we know what the money spent preventing risk will produce exponential returns, do we so often choose to ignore risk management and take our chances?

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