Every time I tell a friend or customer that risk includes opportunities, I get pushback. “Okay, Ted. You say that, but how exactly does it work?” This post describes how.
Let’s use the example of a retirement broker. Sales of 401(k) plans have been flat, and a new study shows that 40 percent of plan sponsors are now looking for new retirement brokers. The broker could be in trouble.
Instead of trying to merely retain her customers, the broker decides to focus her energies on capturing some of the 40 percent of people who are unhappy with their current brokers. She creates a marketing plan that concentrates on how her customers research products online. Her plan includes a strong social media presence, more face-to-face meetings with her plan sponsors, more communication touch points, and a wealth of free information on her website and blog, to which she directs potential customers when she’s in conversation with them on Twitter and LinkedIn groups. She engages her entire firm in trying to capture the impending business before it hit the market.
Our broker has learned how to find opportunity among the risks she faces.
Create a Process
Like our broker, risk managers can grab hold of opportunities. When facing most potential issues, it’s always smart to look at it from both sides – what are the threats, but also where are the opportunities? Then apply a process to ensure your organization fully capitalizes.
Own. Assign champions to each opportunity you identify. Make sure there is a single responsible party at the top. By assigning ownership, you assign accountability, which typically translates to action and results.
Explore. Gather data from team members, industry sources, potential customers, and other stakeholders.
Measure. Decide what should be measured, and what results would justify putting more resources into the effort. Without these key numbers, it will be harder to determine what’s worth pursuing.
Pilot. If an opportunity looks promising, create a pilot program to test the feasibility of your opportunity. Create a program timeline, objectives, budget, and evaluation process and appoint a team to conduct the pilot. Share the results with your stakeholders. (An upcoming post will go into more detail about what makes up a good pilot program.)
Review. Part of your process should include periodic reviews. Are benchmarks set and met? Where is the project in its lifecycle? What is the budget? Have other issues arisen? How are those being handled? Is each person following through on his or her responsibilities or assignments? Is this still a viable opportunity?
Untapped opportunities surround us. If we take the time to examine our risks closely, often we’ll see areas that we can exploit to our advantage. But like threat mitigation, opportunities take planning. If you take time to really examine the possibilities, you could gain significant advantages and improve your organization’s overall results.
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