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Work On, Not In, Your Business: How to Identify & Prioritize Emerging Risks

 

emerging risks ellerbrock-norris

Let’s look at two risks that have become a reality within the last 20 years: cybersecurity and Covid. 

In 2001, cybersecurity incidents claimed six victims per hour worldwide. Twenty years later, that number jumped 1,517% to 97 victims per hour. In that same time period, the average cost per hour spiked from $2,054 to $787,671.That’s a huge increase, but it’s been gradual. What was once a rare crime has slowly reached the point where every American has now either been the victim of cyberfraud or knows someone who was.

Businesses have been building their defenses for years at this point—heck, you can even get cybersecurity insurance—yet the threat continues to evolve on a real-time basis

Cyber risk has become a greater and greater risk over time, as opposed to something sudden like the Covid-19 pandemic. 

Simply put, there was no way any business could prepare for a pandemic, from supply chain issues to quarantine requirements to health risks. 

We live in a world where both types of emerging risks—slow and sudden—exist for every business. So what should you do?

Today, I want to share four steps you can take to get a better handle on the emerging risks facing every business.

Step 1: Shift Your Mindset

You’ve heard it a hundred times before: Work on your business, not in your business. Many business owners are so deep in the weeds of operations that they don’t notice loud and obvious risks bearing down on them like a lawn mower. 

It’s hard because the ability to zero in and excel at your business is what makes you good at what you do.

No one knows your business better than you—what it takes to keep it running, and what could shut it down in a heartbeat. If you don’t make space to address the reality of emerging business risks, no one will. 

In order to do that, you have to take a step back and shift from a focused to a holistic approach that can help you see the risks better. 

Business owners tend to be really good at casting a growth vision for the next three, five or ten years. The most successful companies are also casting a broader vision to include challenges and risks to the business to get an idea of how the landscape will change.

Step 2: Check Your Systems & Processes

Businesses tend to be reactive, not proactive. That’s a problem, especially when it comes to emerging risks, which may not even be a reality today but could have a significant impact on your business in the future.

Any company’s risk preparedness is only as good as its systems and processes. 

Think about your business as a whole: Where do you have measures in place that allow you to step back from daily operations and proactively consider the broader context of your industry, competitors, supply chain, etc.?

The first step could be as simple as joining an industry-specific association that can help you keep your ear to the ground so you know what’s coming. Read their newsletter, go to meetings, talk to other owners. Then put regular meetings on the calendar to discuss a plan of action.

Step 3: Get an Outside Perspective

While you know the risks of your business better than anyone, you also look at your business differently than anyone else does. It’s your baby, it’s your life’s work, it’s your life savings, it’s your retirement plan. You’re too close to be able to look at it objectively.

You need someone on the outside who understands your business. That’s where a risk management expert comes in. At Ellerbrock-Norris, we’ve helped hundreds of businesses navigate the risk landscape, which makes us that much better at helping you keep your finger on the pulse of your industry. 

If you don’t work with a risk consulting or advisory company, there are a variety of other consultants you could work with, including individuals from industry associations.

Whoever you work with, they can help you tackle step four…

Step 4: Ask the Right Questions

Once you have your team assembled, they will want to look at your business from every angle. Like a colonoscopy, it might be uncomfortable, but it’s for the best.

The questions you address are unique to your business, but here are a few that can help get the conversation started:

  • How could current risks evolve in the coming months and years?
  • Which emerging risks are similar businesses addressing?
  • What is your five-year plan for your business?
  • If you plan to expand your business into other offerings, what risks might be involved?
  • When do you want to retire?
  • Are you planning to sell?
  • How can we start preparing for your exit now so you’re ready when the time comes? 

How Prepared Are You?

New risks emerge every day. From cybersecurity to legislation to supply chain issues, the winds of commerce are constantly changing. 

Our risk management experts can help you face the future with confidence, knowing that you’re as prepared as you can be. Schedule a consultation today

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