learning risk management in your business
Learning risk management in your business is essential and plays a crucial role in our ability to grow.
I have recently been working with a coach about risk-taking in my business, and the findings are pretty interesting. I am a risk-taker, so it is an exciting journey to discover how this is helping or hindering me.
In my experience, being comfortable with risk does not mean you will be successful. Some of the most degenerate gamblers I’ve met are comfortable with risk, in fact, too comfortable. Instead, it comes down to how quickly you recognise and deal with risk. The key is identifying risk, dealing with the threat, and using wisdom to implement the right processes to reduce hazards.
Practice, skill, understanding and wisdom
I read an interview with a professional tightrope walker recently. To the observer, it looks like a death-defying and frightening experience. To the tightrope walker, it’s another day at the office. However, his practice, skill and training offset the inherent risk, and they have many safety procedures.
I’ve seen this often with the best professional poker players. I have watched them wager nose-bleed, scary stakes, but the most disciplined ones hardly gamble when the money goes in. They have the best chance of being victorious. They know the mathematics, odds, and their opponent’s tendencies so well that they make the best decisions.
Risk management in your business is essential, starting with recognising the threat to your business. Good risk-takers understand the risk in a situation better than anyone else. They are thus able to cover the downsides.
The best risk-takers are not afraid of risk but do not take threats lightly. First, they gain as much information as they can. Then, after weighing their options carefully, they make prudent decisions and move forward confidently.
In our Fun Casino hire industry, some of the risks are hiring the correct type of staff. We need someone who cares about people and likes people. We also pay attention to our clients; do we need to have deposits from them? Are they the type of clients that have a 90-day policy? Are there things we can implement to avoid accidental damage or payment problems?
I am writing down all the known risks in the fun casino hire industry. Then, we’re writing and putting in processes that make events safer and better.
Good risk management is assuming the worse and then putting processes in place to minimise the chances of this happening.
Thrill-seekers easily fall into this category. Having fun while building your business is necessary, but treating it as a spontaneous bungee jump is dangerous. It should never be about experiencing thrills. Thrill-seeking often puts us in a position where we start needing more and more to get the same buzz. It sometimes exposes us to taking unnecessary risks. If you risk everything, you can win or lose it all.
Secondly, putting ourselves under pressure to win short-term leads to lousy risk-taking. It often leaves us not seeing the danger ahead and not putting anything in place to protect our downside. It sometimes comes from a sense of entitlement.
Thirdly, the lack of information also leads to lousy risk-taking. Sometimes, there is not enough information, but we have to process the information we have. If we work with false information, we will often make bad decisions.
Thank you for taking a few minutes to read our blog. I look forward to learning from your comments.
Fellowship is always greater than the prize.