No one can predict the future, but if we could, it would make certain risks we take in our lives, such as running a business, much less nerve racking. That supply chain issue a few months down the road? You would see it coming a mile away. Unexpected labor shortage due to a pandemic? You’d be able to act well ahead of time to negate its impact.
Unfortunately, this is not reality. Business leaders know all too well that the only thing you can be 100% sure of is that you’ll be thrown a curveball from time to time. Fortunately, there are steps you can take to ensure that you and your business are well prepared when those curveballs come flying. One of those steps — and possibly the most important in the business continuity process — is completing a risk assessment.
A risk assessment evaluates the objectives, goals, processes and structure of your organization, allowing you to identify the aspects of your business most prone to risks and which kind. By managing risk, you’re lowering the chances that something can go wrong. While risk assessment has traditionally been something only larger organizations would consider, there has been a recent uptick in businesses of all sizes realizing the importance of implementing risk strategy as part of their foundational business plans. Especially given the impact of unpredictable outside forces such as COVID-19 and the increase in cyberattacks, risk assessment has become crucial to the longevity of any business.
With increasing demand in the manufacturing arena, risk assessment is a vital tool for any business in the space. Organizations need to be thinking about their workers and suppliers, logistics, raw materials, global footprint and other concerns, identifying where problems might arise and having specific plans in place to address them. Recently, many organizations have had trouble with staffing due to COVID’s continued impact, but the pressure to keep up production hasn’t lessened. Organizations need to be thinking ahead and anticipating contingencies like this and determining what options exist to mitigate them.
This starts with a risk assessment up front, either handled internally or with a trusted third party, which more and more businesses are doing. Hiring a third party allows organizations to tap into the knowledge base of people who handle risk management topics every day, without diverting valuable time and resources from internal administration personnel. However, it is a collaborative effort; those at the highest levels of management need to be actively involved in this process, as it is they who are ultimately responsible for executing the plan and ensuring that all employees are on board.
Risk management helps you prepare for the worst while you hope for the best and is a critical component of your overall business continuity plan. A risk assessment allows you to test a potential situation, execute against it and come out with a result — then take proactive measures to tweak it and test again. Organizations will always be learning and testing their plan for better outcomes, as new risks constantly arise.