Can Your Company Benefit from a Risk Survey?
Can Your Company Benefit from a Risk Survey?
If your organization is committed to achieving sustainable growth, conducting a comprehensive business risk survey can help you achieve your objective. Most companies and other types of organizations face many types of known and hidden risks. Some of the risks may be known to some people in the organization, but not to others including people generally responsible for identifying and managing risk.
Conducting a risk survey enables your company to measure risk likelihood and potential risk impact, and to gather comments explaining the risks and suggestions for mitigating the risks. Risk surveys are usually sent to senior and middle management across the organization. Some organizations also have their Board members and lower level managers participate in the risk survey.
Every risk survey should be customized to include all possible significant risks. People participating in the risk survey should have the opportunity to include any additional risks they know of. Comprehensive risk surveys typically include 60-80 types of risks.
Risk surveys enable companies to identify and avoid or mitigate risk incidents that can be very costly, that can be harmful to employee or customer safety, that can result in significant lost business, that can kill your company's reputation or that can result in legal or regulatory action. Risk surveys also identify competitive risks, technological risks and a wide range of other types of risks.
Failure to identify and deal with significant risks has resulted in many well known failures and countless less known failures. Following are just a few of the better known failures caused by risks that were not identified and/or dealt with before it was too late:
Worldcom scandal/failure
Enron scandal/failure
Arthur Andersen scandal/failure
BP Gulf of Mexico oil spill
Exxon Valdez oil spill
Massey Energy West Virginia mine explosion
Toyota brake failures
Leaded paint on toys made in China
Space shuttle Columbia and Challenger disasters
Wiki Leaks leaks of voluminous classified information due to IT security problems
Tylenol tainted with cyanide
Bridge failures due to design flaws, construction problems and inadequate inspection/maintenance
In the U.S., medical errors are estimated to result in 44,000 to 98,000 unnecessary deaths, in hospital settings, and 1,000,000 excess injuries annually
Iraq war fought based on faulty intelligence and decisions by elected officials
Faulty Florida election ballot may have resulted in the wrong person chosen as President
IBM failed to take Microsoft and PC's seriously
Coca Cola failed to understand the risk of introducing New Coke
Hackers attacking company websites
Critical risk questions for you and your business
1 - What can lack of risk information followed-up with appropriate action do to your organization?
2 - Is your company facing risks that might be very costly, or even cause your company to go out of business?
3 - Might a business that doesn't yet exist put your company out of business within 2-5 years?
4 - What is your business doing to identify and measure risk likelihood and potential risk impact?
5 - Is it time for your company to conduct a risk survey?
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