Traditionally, risk management practice centres around portraying and communicating potential negative events in any given environment or organisation. However, this approach does not take into account the potential opportunities that the organisation could take advantage of. Though the risk is defined as an uncertain future event or condition that could result in a negative or positive outcome, businesses that focus on the former rather than the latter fail to maximise on key opportunities to achieve both short- and long-term business objectives.
According to Leon Soko, a Business Analyst and Advisor at CURA Software Solutions, the aggressive pursuit of opportunities is just as important as the traditional approach to risk management. “The traditional approach to risk management is reactive – focusing on the potential for what could go wrong and how to mitigate the impact of these events. While it is important to accept, mitigate, transfer or eliminate risks through a traditional risk management approach, companies should adopt a positive approach and also pursue opportunities for growth that arise from business operations.”
It is important to note that not all opportunities are worth pursuing. An essential tool to aid in the decision-making process of whether or not to pursue an opportunity is a Cost-Benefit Analysis. An analysis compares the cost of pursuing an opportunity to the potential benefits that could be gained. If the benefits outweigh the costs the opportunity should be aggressively pursued by the organisation.
Jessica Knight, a Strategic Manager at CURA Software Solutions, says, “An aggressive approach is necessary because opportunities are temporary. This does not mean that companies should be reckless in their pursuit of opportunity, for fear that it may pass them by. Aggressive opportunity management is only worthwhile if it aligns to business objectives or enables progress toward the vision of the organisation. A cost-benefit analysis is only a meaningful metric when the opportunity you are measuring aligns with the context and aspirations of the business.”
Soko concludes that taking a positive approach to risk is the difference between an organisation thriving, rather than merely surviving. “In our current economy, it is important to consistently seek alternatives to how you can improve your business operations or develop new sources of revenue. The Fourth Industrial Revolution (4IR) ensures that if your business does not continuously evolve with the current market conditions it will get left behind. The flipside to risk management just might be the only thing that saves your business.”