Category Archives: Risk Management

How do you find your blind spots?

Posted on by

blind spotRecently, an out of town acquaintance was in Portland for the summer. Being from a major city, she never learned to drive. Not a big deal as she was staying close to downtown and could bike to work and around the area for fun. We were talking about how to get around and I suggested she be careful how she navigates the bike lanes. They are on the right hand side of the road and if a car needs to turn right, they would cross through the bike lane to turn, making it incredibly important to always watch for vehicle blind spots. Having never driven a car, she did not understand the concept of a blind spot, so I explained it to her.

Blind spots exist in business too. They are danger lurking in the wings that can’t be seen. And the only way to find those blind spots is through experience or, if it does not exist, help from someone who has the experience. Even if you think you have the experience, you may be too close to the situation to see the blind spots. How are you watching out for blind spots?

Have you really thought about all of the options?

Posted on by

Have you considered all the optionsPigs and goats. It was the solution to a problem that many face, the need to clear brush. I have to admit that it is not a solution that would have ever crossed my mind. For the manager of a farm program at a local winery, it was the solution that made the most sense. The goats were quickly and effectively able to clear the brush. The pigs were unleashed next to address the roots. They quickly and effectively cleared the root structure and completed the removal of the blackberries, leaving land that was cleared and ready to utilize.

There are always many options to resolve problems or grasp opportunities. To some the options may be obvious, to others they may not be known. Getting the right people around the table that have the skills and background, that are aligned with the organizations values can help get you there. In the case above, there was no time pressure and the values include sustainability and organic farming. By including the right people, they were able to utilize an option that fit with their purpose and values. How are you making sure you include the right people and get all of the options on the table?

Momentum vs. Technique

Posted on by

momentum vs techniqueSaturday morning starts with a tough workout with Babs, my personal trainer. Over the years, she has taught me a lot about the proper technique. When we first started, she would almost always tell me to stop and start over. After a reprimand for using momentum, she would instruct on the proper technique.

This week, she was reflecting that her regular group of people know the connection between mind and body, enabling utilization of the proper technique. Momentum is easier as the motion propels the weights or the body in a direction. With momentum, and not having proper technique, it is possible to get hurt or create an out of balance in the body.

Business is the same way. Getting momentum can be a little tough at first. But once things start moving, the momentum can propel the business forward. And while having momentum is critically important, it should never be at the sacrifice of technique. Without proper technique (skills, capabilities and focus), the business may veer off course, having a negative impact that may be detrimental long-term. How are you differentiating between momentum and technique in your business? What can you do to refocus on technique?

The market always turns

Posted on by

the market turnsThere aren’t too many industries that have no market cycles. Some are more significant than others. Over time, as business grows and changes, some companies lose sight of the market, how they are positioned and their cost structure. As a result, erosion starts to occur in the profitability of the business.

This is the point when many companies are bought. But even if a sales transaction doesn’t take place, it’s time to put some tension back into the business. Why? Because the market always turns at some point and if not addressed, the business may go out of business due to high fixed costs and lack of market insight.

What does this mean? With lack of market insight, the company will miss the market signals that indicate it is time to adjust the business as the market demand starts to drop. With a high cost structure, the company may not have enough time to adjust before it runs out of cash. Thus becoming another company that doesn’t make it through a market cycle.

This is where it is critical to have a focused management team that has a strong sense of urgency. You never know when the market is going to turn, so acting with a sense of urgency as if the market turn is today or tomorrow, will position the company well for when it actually does turn. How are you positioning your company for market turns?

Do you see the risks in your path?

Posted on by

do you know the risks on the road?It was another rainy day, like many at this time of the year. And as you might expect, there were a number of car accidents on the road. This particular point in the highway is a trouble spot. The road inclines and bends to the right to weave around the hills. Given the design, the water flows rapidly across the left lane in a way that causes hydroplaning at times. I drive this path often and know to watch for it. But not everyone does. Today, there was a pretty significant accident in this spot.

In business, there are many risks in the road ahead. Sometimes you know to watch for them, because you have been down the road before. Other times, you may be on a road you have not yet traveled. How are you watching for the risks ahead to make sure you are able to safely navigate them?

The Song Remembers When

Posted on by

Remember whenMore than 20 years ago, Trisha Yearwood had a popular song that focused on how songs can take you back to a moment in time. I’ve been thinking about it over the last few weeks as situations or phrases have triggered conversations of the past. A chat with a mentor, a key risk in a company that had a big lesson learned and approaches to business that ebb and flow depending upon the time. And while Trisha’s song was about a relationship, the message can be broadly applied – certain situations can quickly take you back in time.

The thing is, many times memories reside with a person. They become embedded in the fabric of their experiences and help shape them into who they are. The challenge in a business context is taking those learnings and embedding them in the fabric of the organization so the business becomes a learning organization and can take those prior experiences and apply them to similar situations today. Companies that do this well create a culture that allows for quick decision-making, but has these experiences in mind. They stay away from heavy bureaucracy and cumbersome processes. How have you created a learning culture in your organization?

Trust, but Verify

Posted on by

trust but verifyThe topic of trust comes up regularly in conversations, usually by someone who feels they don’t have enough latitude or autonomy in their job. Many times the person feels micromanaged. And in speaking with their supervisor, the perspective is the person wants complete autonomy without having to report status of their work. Both are equally valid perspectives. The challenge is finding the balance where both parties feel their needs are being met.

When thinking about this topic, a quick search of the internet revealed the quote was regularly attributed to Reagan when dealing with the Russians during the cold war. Relations at work shouldn’t be as tense as US relations with Russia during the cold war. Finding common ground through conversations about what each person needs and the importance of having free flowing information to manage the business can be enlightening. How do you trust, but verify?

Is finance to blame when a business struggles?

Posted on by

finance problemsWalking around a business can tell you a lot. Are people focused and moving with a sense of urgency? How is the safety record? Are a lot of people getting hurt? Are there clear goals and objectives posted on the walls? Do the operations look efficient or are there a lot of extra steps that don’t seem value added? You don’t have to have a sheet of paper with numbers to know. A strong management team will know if the business is operating at its potential or not.

So, when you hear that the reason a company is doing poorly is because the finance team isn’t functioning properly, it’s time to take out the BS detector and start challenging the excuses.

Yes, finance has a critical role in the success or failure of a company. If it is not functioning well, there are certainly a number of issues being missed in the company. But a poorly run finance department is not the root cause of a business’ problems. Rather, it is a symptom. So when you hear this commentary, dig deeper and find out what is really going on. Bigger problems lie underneath.

How safe are you?

Posted on by

how safe are youThere it was, rolling down the freeway on the top of a flatbed truck. A silver, concave hunk of metal that used to be a minivan. The wheels were turned in and the driver’s door and seat were pushed in to the middle of the vehicle. Whatever happened, it was clearly serious and hopefully one that the passengers survived.

This sight was still in my mind a few days later when speaking with someone about driving and the illusion of control. As much as you do to be safe, at times it is impossible to avoid the unsafe impact of others.

In business safety, programs are designed so that all people are focused on being safe, not only individually, but collectively. The hallmark of a truly successful program is creating a culture that stays with people not only at work, but at home. How are you creating an environment that creates a culture of safety?

The Perfect Storm or the Last Straw

Posted on by

perfect storm or last strawI was recently in conversation with a group of folks talking about a business that was struggling financially. One of the folks commented that the company was experiencing a perfect storm of events, the last of which was a downturn in the market. And while the comment seemed to resonate with people in the moment, it wasn’t actually the case. There weren’t several events happening at the same time that caused the issue, rather the market downturn was the last straw.

It is important to understand the difference between a perfect storm and the last straw. In business planning, it is difficult to plan for a perfect storm- it is an unexpected and difficult to predict scenario of multiple independent events that happen at the same time, so developing a response in advance is nearly impossible. The last straw, on the other hand, is possible to plan for if management is actively looking at the company’s risk profile, cost structure and market presence. How are you doing at looking at the risk in your business and avoiding the last straw?