One of the things that the pandemic has taught business owners is that uncertainties are just around the corner. They can come completely unannounced, drastically changing the world as we know it. They can disrupt everything, even what is considered stable and safe. Before you know it, popular brands are closing and declaring bankruptcy, trying to mitigate the losses caused by sudden lockdowns and restrictions.
Risks are always present, making enterprise risk assessment and management a must for every business. When you identify and acknowledge the risks to your business, you can manage and plan for the right response. When you effectively manage these risks, you are saving not just the company but your employees as well. However, COVID-19 did not give most companies the time to detect and respond to its risks.
If your business is still up and running after all the disruptions the pandemic has caused, you are on the right track. Here are some suggestions on how to effectively manage the risks and keep your business running efficiently.
1. Identify the risks.
Risks abound in these uncertain times. A thorough risk assessment is essential so that you can identify existing and potential risks. It can give you a clearer picture of the situation and take proper actions. These are the four areas that you should consider when identifying risks.
- Risks to Your People: What are the risks that can affect the safety, health, and productivity of your employees? What are the risks to your clients?
- Risks to Your Business: Will people still buy your products and services? Will the way you do business still work?
- Risks to Your Chain of Supply: Will there be a disruption to your supplies due to travel restrictions and lockdowns in place?
- Risks to the Demand of Your Products: Has demand recently been affected negatively?
Once you have identified the risks, the next step is to prioritize them based on their chances and impact. Those that have higher chances of occurring should be prioritized and addressed first. If you do not prioritize, you will be overwhelmed and inefficient in facing them.
2. Assess your readiness.
You must know where your company stands in terms of being ready to face these risks. Assess your business continuity program in place. If you do not have one, now is the best time to create and establish one. Identify the gaps in your processes. You can set up a crisis and risk management team that will be in charge of the following tasks:
- Assess risks and the ability of your company to respond to these risks
- Monitor and analyze company performance and market situation
- Manage crisis response and business continuity programs
- Maintain communication with the stakeholders
3. Perform a business impact analysis.
This step allows you to identify business functions and processes that are essential for your business operation continuity. It can lead you to identify critical core functions that should not be crippled and should have a sound business continuity plan.
4. Mitigate the risks.
Now that you have identified the risks and the functions that are critical to your business operations, you can plan how to respond and mitigate identified risks. Depending on the nature of the risk, you can do the following:
- Prevention of the risk.
- Reduce the risk impact.
- Have a recovery plan in place.
- Make some necessary adjustments.
5. Continuously monitor the situation.
Make sure to have a team that will monitor and assess the situation of your company. Evaluate the processes that you have in place. Are they working? Do you need to update them? Priorities can change in a short time, so your risk management team should always be on the lookout for these sudden shifts and changes.
You must also monitor the situation of your employees. Are your work from home employees motivated and engaged? Do your onsite employees need to take some time off? What can you do to make the situation safer for them and their families?
6. Educate and motivate your employees.
Your employees are currently and will always be your company’s greatest asset. Educate them on how your company can handle the situation and what their part is in the whole process. Inform them of the safety measures that you have in place for them. An open line of communication is needed to make your workforce feel safe, confident, and motivated. Monitor their health and have a system that will help keep them healthy. Ensure the safety of their working environment to protect your workforce.
Risks are a reality that businesses cannot avoid. With proper risk assessment and response in place, you can reduce the impact of these risks to your business continuity and operations.