Why Risk Matters?
Risk and business are inseparable!
While the main aim of business not the avoidance of risk, the active management of risk (i.e. to get the maximum return for the risk you take) is a critical part of running an effective business. Before you can do this however, you have to better understand the risks you are exposed to, what risks to take and the right time to take them.
It is all about making the right risk decisions that suit your business, ultimately to generate a suitable return for the providers of the risk capital.
Dott Risk promote a systematic approach to risk management, part of which is the active use of Checklists and Assessments. This systematic and disciplined approach to risk management is often used in highly complex situations and industries, with high profile examples including F1 pit crews, airline pilot crews, the hospitality industry and surgical theatre teams.
They have proved their effectiveness by establishing clear responsibilities and accountabilities and a standardisation of complex procedures. They also remove the potential influence of strong or authoritative personalities and eliminate human fallibility. The use of Check-lists in these environments has seen a major reduction in errors, accidents, deaths and has saved considerable lives. Check-lists compensate for the inbuilt tendency of human beings under stress to forget or ignore what is important, including the most basic things.
Extending the use of Check-lists and Questionnaires as key tools for risk management in any business will produce similar results and eliminate and reduce many potential losses.