As an executive, you’re probably an expert firefighter by now. Every day, it feels like a new fire crops up that demands your attention and prevents higher-level work from getting done. Over time, though, executives and leaders may begin to notice signs of “potential fires” – or emerging risks – as they crop up.
Knowing these signs and keeping an eye on them is the best way to prevent full-blown fires in the future, but it does take experience and a handful of tricks to get started.
Signs of an Emerging Risk
Unlike a full-blown problem, an emerging risk is something that an executive or his/her team should keep an eye on – not react. Signs of minor emerging risks include:
- A slew of employees quitting
- Small system crashes
- Hacked servers or computers
- ecreasing sales in a handful of stores
There is also large-scale emerging risks that crop up seemingly overnight. Large-scale emerging risks might include:
- Changing regulations that affect your organization
- Tax changes
- Economic Crises
- Shortage of goods
- Entire tech system crashes within your company or office
- New competitors with identical, more affordable products
It is your job to separate the minor emerging risks from the major ones and decide on a plan of action. With most emerging risks, however, the first step is to simply monitor the situation.
Managing Emerging Risks
The key to preparing yourself, your team, and the organization as a whole for change is to manage emerging risks. This means:
- Recognizing that a small shift is happening
- Noting that small shift with quantifiable information (numbers, percentages, sales, etc.)
- Tracking that shift to see if it goes away or gets bigger
The best way to recognize, quantify and track emerging risks is by simply hiring experts in each sector of your organization. Experts and people with many years of experience are going to know if something is changing – and they’re going to be the ones you rely on to meet it head-on.
There are also plenty of risk management professionals and software that can help you decide which situations to pay attention to and which ones to leave alone. Risk management is for much higher-level concerns, such as global economic instability, potential lawsuits, etc.
If your organization is not looking for large-scale risk management, all you need to do is cut out time to “test the waters” in your organization to make sure everything is as it should be.
Time to Test the Waters
When you were hired as the executive for a particular company, branch, or team, it became your job to keep track of its vitals. Every week, month, or quarter, you should be asking:
Are our sales numbers OK?
Is our competition once step ahead of us?
Is our computer system helping us or hurting us?
What are we doing to meet changing regulations or tax codes?
Hiring professionals who can answer these questions for you are the best way to streamline emerging risk management. From there, creating a system (no matter how simple) to track changes in each situation is a basic best practice for preventing future fires.
With any business, no matter how large, there is always an element of risk involved. Times changes, situations adapt, and it’s your job as an executive to make sure a company is prepared for the future.