18 Jul CDF Key Takeaways: Capitalize on Near Misses
We hope you’re having a wonderful week. Below are your Key Takeaways from last week’s breakfast event Capitalize on Near Misses.
While many company specific examples were given on how to handle risks and capitalize on close calls, below are the key points that will apply to all organizations. We hope you will be able to use these to your advantage and remember them as you are confronted with both anticipating risks and dealing with them as they are playing out.
- Political Risk: How Businesses and Organizations Can Anticipate Global Insecurity, outlines various types of political risks that can affect businesses and draws on many examples. This book was recommended by the moderator.
- Consider geopolitical dynamics, natural resources, social activism, terrorism, etc. These are all risks to business that are often go unconsidered, depending on the industry.
- Accept that risk is constant, but find ways to reduce it, share it, eliminate it and/or avoid it entirely.
- Manage risk levels without being overly controlling and foregoing beneficial opportunities. Define tolerance thresholds.
- Use the COSO Enterprise Risk Management Framework to help score a risk. It will help to determine the likelihood, impact and velocity of a potential risk.
- Try to quantify the risks that are normally considered non-quantifiable.
- Plan for and anticipate events so you can capitalize on them. Do not just plan for the high likelihood events, but for low likelihood events with high consequences.
- Get ahead of any potential issues and involve all stakeholders in order to do so. Determine who key players are and get different perspectives. This will help to establish trust both internally and externally.
- How do you anticipate risks and plan for them? Having a diverse board can help! Also, read, listen and ask questions! Talk to people of all ages and backgrounds. You’ll never know where you can draw parallels or what you may have missed based on your own myopic experiences.
- Avoid appointing a risk committee. This gives people a false sense of security, because they do not think they need to also consider risks.
- When confronted with a risk, do the right thing, not just the easiest thing. Be honest and share your side of the story. Build goodwill and protect your credibility. This will help the brand, and will establish trust. Trust is paramount.
- Never assume you can keep a secret within a company.
- What you say matters less than what you do. Hence, “actions speak louder than words.”
Words of Wisdom
Haney Hong: Develop a “Color Code of Trust” system for your stakeholders – using red, yellow or green indicators – to provide a framework for strengthening communications.
John Skousen: Cash is king. Never run out. Utilize the tools out there to recognize risks and plan for them with actions.
Amy Wakeham: Listen to diverse groups/everyone.
Michael Berthelot: In the words of Mike Tyson, “Everyone has a plan until they get punched in the face.” Work with the facts you have, not the facts you wish you had.
Please save-the-date for our next breakfast, Demystifying AI Decision-Making for Directors, on August 23rd from 7:00 am – 9:00 am at the Hyatt Regency La Jolla. Details will be forthcoming.