In 2001 I was head of Business Risk Management at Lloyds TSB Insurance. I led a team of risk-aware individuals who planned for a strategically focussed, resilient future. We watched trends. There were quiet, benign times when not much appeared on the horizon that could throw us off course. There were also dynamic times when it seemed every day brought visible change that affected the business. Proper risk management came from never being surprised by events however unusual and rare. It came from having planned a response before the crisis appears.
Business Risk was something that I define as “events that might happen, however unlikely, that impacts your ability to do business well.” As humans, we are not designed to evaluate uncertainty. We tend to get both probabilities and impacts wildly wrong. Risk management needs a structured approach.
Using trends
One way to address the human shortcomings around risk is to consider trends. Trends are often apparent long before their impact strikes. Before the 2008 banking crisis, had anyone been looking, the trends in the growth of derivatives in the subprime mortgage market should have highlighted the impending risks. They were spotted too late. Not because they were hard to spot, but because no-one was looking.
In small businesses resources are limited. It is essential to identify where to look for trends, to understand which ones matter and to think about what will affect your business. As a strategist, I am working on plans that will change my clients for years. Consequently, I am looking at risks over similar timescales.
An example – GDPR
GDPR – The General Data Protection regulations – create risks for businesses around their handling of, and use of data. It is part of a broader trend, towards more control of personal data by individuals and companies, and a more general direction in the consequences for businesses that ignore regulations. Strategically focused firms are going further than GDPR requires, playing to where the trends are pointing, beyond the waypoint of one specific rule. By doing so well, managing the risks creates opportunity.
Which trends matter in your business?
That depends on context; I ask businesses to consider why their clients hire them. Fully understanding, in depth, the things that would stop the company being the right choice for its clients is always a smart place to start.
Are we about to see the demise of International speaking bookings for British speakers?
Interesting article and one that reflects a post I made in Speaker’s Corner on Facebook
“For the past ten years British speakers have enjoyed bookings from across the globe. Often these have come as a reflection of Britain being the 4th largest economy with world with leading businesses and the centre of the world’s financial industry. But as Britain’s economy slips, Brexit sidelines the country in the eyes of others and the government is seen as being ineffectual will the attraction of ‘British Speakers’ wane as a result?”
Thanks Stephen.
I do think speaking is an area that is particularly open to purchasing being driven by perceptions, of the speaker themselves (so reputation matters), of their subject matter (so sentiment matters) and of their market (so market presence and capability matter). Trends take time to appear above the radar, and I’m not sensing the British speakers who speak in Europe have yet begun to feel the impact of events like Brexit. Some may never do so because of their personal reputation. However, the ease with which new (to territory) speakers could rely on market perceptions and subject matter perceptions to overcome a lack of local credibility is, I think, already changing.
This is just as true for companies of other products who are seeking to start exporting to Europe to compete with established players. Two years ago it made sense to do that, today, it’s definitely harder. The existing players may be able to hold on to their markets, but there’s an elephant in the room for new entrants.