Risk is something that is almost unavoidable in the business world today. “Risk Management” programs have been implemented among all levels of an organization to recover the adverse affects of a risky decision. BUT, what if there were steps to take that would allow your team to reduce the adverse affects? Well, that’s where risk mitigation comes in.
Risk mitigation prevents the affects of adverse decisions. It is a process that you and your key decision makers take before decisions are made that will save time, effort, and stress in the long-run. There are different ways to go through risk mitigation, however there are a few crucial steps that should be incorporated in your decision making process.
Similar to what was mentioned earlier, risk is almost unavoidable. Every decision that your team makes will have some level of risk involved, however the point of this entire process is to minimize that risk. Failing to accept risk in decisions could be detrimental to your business because you won’t be expecting the possibility of negative results. Accepting this potential will allow you and your team to prepare for the worst, while making steps to plan for the best.
Looking at Possible Outcomes
To be able to plan for the best, you need to look at the possible outcomes of the possible decisions you are evaluating. Even if you have picked out a decision, there are still many different outcomes that could happen, and knowing and preparing for those outcomes will really keep your team ahead of the game is things go haywire.
Evaluating and Managing Results
Once the decision has been made, your team still needs to follow the outcome of it. Evaluating the results of your decision will allow your team to asses the decisions that you made to get you to where you are, which you can use for future risk mitigation. If needed, your team should also manage the results if there was more risk than anticipated.
Risk mitigation should not replace risk management completely, however, preparing for risk and trying to reduce it should be a major focus of organizations to be able to move on from it quickly, rather than waiting for it to occur to start taking actions to reduce it.