Top 3 Things to Prevent Putting Your Business At Risk
The past 18 months have been tumultuous to say the least. The level of business exposure and risk that companies have experienced as the world rebounds from the most significant global event in our generation has put many companies out of business. However, those CEOs and companies that embodied the old adage, “no reward without risk” were able to not just mitigate their losses but put their companies on a whole new growth trajectory. As the CEO of your organization, your team members, employees, and other key stakeholders are reliant on you for your leadership. Take the right calculated risk and it could pay off big for your organization’s growth. But, take the wrong risk and your company could be left reeling trying to recoup significant losses. The CEO peer group at The Brain Trust recommends considering these three risk factors before making the plunge on a new business decision or strategy.
1. Is the risk authentic to your organization’s mission or values?
Risk-taking should always be strategic, never reckless. Think about your company’s long-term and short-term goals. Is the risk you’re considering in line with what your company needs to accomplish to stay competitive, expand, or to fulfill its mission? If the answer is “no” then it is a risk that is likely not worth taking. Whether it is investing in a new product or adding another location CEO coaching experts strongly advise researching all potential outcomes of your decision. Thinking through the risk in its entirety is an excellent exercise to ensure that all angles of your decision have been analyzed and all aspects of the risk are strategically positioned to provide a direct benefit to your organization.
2. What are the chances of business-ending failure?
Part of being an effective leader is to be realistic in how you manage, lead, and make decisions as well as anticipating the potential outcomes of your decisions. That’s why it is essential to fully evaluate both the potential success and the potential failures of any risk and determine if your company can recover, should things go awry. In some cases, the “go big or go home” principle may apply and you may need to take a large risk to propel your company to the next level. However, CEO advisory groups often caution on doing this, and, instead, suggest breaking a large risk down into small and sequential testable risks that allow you to make powerful pivots, if needed. In this way, you are able to easily test the waters and give your business time to respond before proceeding with the next, larger risk that could have consequential repercussions.
3. What can we stand to lose?
As the CEO, the brunt of the responsibility and organizational leadership falls on your shoulders. Taking a risk does not always break down into monetary losses and gains. Intangible aspects such as work-life balance, brand or industry reputation, service levels, self-esteem, and even future career opportunities have to be considered. For example, if you decide to launch a new product or service, this may mean longer hours spent in the office or more time spent away from your family on business trips. Likewise, if you discontinue a service offering this could have larger implications for your staff and overall work morale. It’s these non-monetary consequences that are equally important to consider so you know the full scope (and the ripple effect) of your decisions.
Are you contemplating a significant business shift or decision on the horizon and could use some support? We invite you to consider joining our award-winning CEO peer group so you can tap into the most extensive network of other successful CEOs to get the expert support and guidance you might need. For more information about our CEO advisory group and to apply to join, click here.
