Risk Management – 5 steps to better manage risks

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If this year, 2020, has taught us anything, it is that risk is a part of life for humankind. The sooner we come to terms with it, identify the cause, plan and strategise to arrive at effective counter-measures, the greater our chance to survive and prosper!

What is risk?

Organisations have a number of internal and external factors that make it uncertain to meet their vision, missions, values, goals and objectives. These uncertain conditions that persist are collectively termed “risks”. 

In general, our tendency is to try avoiding risks as a lot of these instances can lead to negative outcomes, but there can also be positive ramifications of risk. The positive results are an outcome of companies being able to capitalise on the opportunities presented by the risk.

Identifying negative risks and avoiding them, while at the same time being able to take advantage of the opportunities presented by positive risks can be a daunting task for a manager, as a wrong call might result in great loses or a missed opportunity for greater growth.

Risk is a future uncertain event and being able to predict the event and putting in place solutions or strategies to either avoid or take advantage of the event is what risk management is all about. But every organisation’s appetite for risk is different and that is usually directly dependent on the tolerance an organisation might have towards risk.

So, what are risk appetite and risk tolerance?

We have all heard the saying “no risk, no reward”. Taking big risks could lead to big losses, or conversely, could lead to greater rewards. 

The risks which are identified as opportunities should be low hanging fruits to deal with and to reap their benefits. 

Risk appetite is the willingness of an organisation to take risks, while risk tolerance refers to how much risk an organisation can bear. 

Risk Management

According to Douglas Hubbard (The Failure of Risk Management: Why It’s Broken and How to Fix It) – Risk management is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.

Risk management can and should be implemented across any industry or vertical, such as project management, operations, finance, military, medical, etc. Like any other department in an organisation, the risk management team should ensure that it is able to justify its costs by first creating value for the organisation by becoming an integral part of the strategy and decision-making process of the organisation. The team should be responsive to changes (both internal and external), systematic and process oriented about their analysis, transparent about their processes, and capable of adapting and growing. 

Effective implementation of risk management will provide an organisation with

  • Early warning to potential risk due to uncertain events
  • Better decision making through a good understanding of risks and their likely impact
  • Effective allocation of resources
  • Reassuring stakeholders

Risk management can be broken down in five basic steps

  1. Plan –  A risk management plan specifies the management’s intent, systems, and procedures required to manage risks, roles and responsibilities, and tools to be used in identifying risks. The plan will specify how the following four steps are to be executed by the organisation. 
  2. Identify – Identify the potential risks, their causes and their potential consequences. This is usually done by a team of subject matter experts  using methods such as brainstorming and tools like SWOT analysis, flow diagrams, Ishikawa diagrams, etc.
  3. Analyse – Once you have identified the potential risks, analyse them using either qualitative (a subjective analysis that is quick and easy to implement using tools like matrices probability and impact matrices) or quantitative (a detailed and time intensive analysis of risk using tools such as expected monetary value analysis, Monte Carlo analysis, decision tree, etc.) methods to classify them as high, medium, and low priority risks. Organisations may not have the resources to plan for all the risks and might be able to accept some risks without action, some with only periodic monitoring, and finally, some with a detailed action plan to take advantage of or to all together avoid the risk event. 
  4. Plan a response – Depending on the priority of the risk, a strategic response needs to be planned, and resources allocated with the goal of reducing the impact of negative risks, and capitalising on the impact of positive risks. Some of the strategies are avoid/transfer/accept/exploit.
  5. Monitor and control – Nothing in this world is static, change is the only constant. Risk monitoring and control should be an ongoing and continuous process. A change in external or internal conditions might result in a low priority risk evolving into a high priority risk or a high priority risk devolving into a low priority one. By monitoring them you will not be caught unprepared!  

This is why, not only is risk management an important module in a number of our online master’s degree programmes, but we also offer a couple of 100% online master’s degree programmes in Risk Management.

If you are interested or have any questions, you can also chat LIVE on WhatsApp with one of our Education Advisors for more information on the programmes we offer, the application process, and for information on discounts we might be offering at this time.

#DILO (A day in the life of) a master’s student – Beatrice

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Through the #DILO series of blog posts we have been bringing you insights into the life of our master’s students, sharing their thoughts and opinions, ups and downs, and key learning points during their online studies. The whole idea behind this series is to make you aware of realities of online studies, and help you in decision making.  

This week we take a look at a day in the life of our MBA student Beatrice. Beatrice is an electronics engineer with over 19 years of experience working in IT. She is currently studying for the MBA in Management Consulting, offered through our exclusive partnership with York St John University, UK, and working for an American company as an IT Project Manager. Along with handling a full-time job and a master’s programme, Beatrice manages a busy household with a husband and two daughters. Here is an insight and some words of wisdom that Beatrice had to share from her own experience. 

With the MBA Management Consulting you gain an understanding of consulting techniques and develop a range of transferrable skills

An Introduction 

Which Uni are you studying with? 

York St John University (UK) 

Which programme did you choose and why? 

I chose the MBA in Management Consulting programme. It allows me to improve my knowledge and complete my profile as Project Manager. 

The Study Plan 

How did you plan to study each module, and what was the reality? How many hours did/do you have to put in each day/or in a week? 

Prepare a study plan and pick a time of the day that works best for you

I planned the modules to avoid overlaps and could make it as planned. It is important to allow at least four to five hours a day, 4 days a week. This can be increased to 5 hours a day when approaching assignment deadline. 

What part of the day did/do you find most suitable to study? (e.g. early mornings, lunch break, evenings, weekends?) 

Allow yourself enough time for each
assignment

What worked best for me were early in the morning and late in the evening, when there is no distraction (work, children, etc.) 

How much time did you devote for each assignment? 

Generally, 4 to 5 days. Sometimes more, depending on the topic. 

Travelling and Communication 

How did travelling impact your ability to study? 

When travelling, other activities make it more difficult to find the required hours to study 

How were you able to interact with peers and/or professors given the time differences? 

We used e-apps that allowed delayed interactions (email, campus portal, WhatsApp). 

A typical day as a master’s student 

What does a typical day as an Online Masters’ student look like for you? 

1. Spend 2 hours early in the morning, reading and watching class videos  

2. Spend 1 hour at lunch time to review and make some researches  

3. Spend 1 to 2 hours at late evening to write or complete researches 

‘Research’ is an important aspect of Master’s studies. Learn to research effectively.

Any advice? 

It is important to have:  

1. The support of your entourage  

2. A schedule that includes your studies, work and personal activities, even leisure. Follow it as much as possible  

3. A contingency plan 

Well indeed, incredibly helpful advice from Beatrice. A contingency plan not only saves you from an unpredictable situation but also helps you follow your study plan with confidence. To get you through the master’s studies we have a great faculty who are subject-matter experts, guide and encourage the students to achieve their potential.  

If you have been dreaming of joining a master’s programme or have had this personal goal to gain a higher education, now is the time! Take the valuable advice from our current students, gain from their experience, add your own unique study strategies, and make your own success stories! I would love to feature you one day on our college blog. 

Chat LIVE on WhatsApp with one of our Education Advisors for more information on all the programmes we offer, application process, and for information on discounts we might be offering at this time. 

What I wish I knew before starting a business -Robert Kennedy College Blog

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Once upon a time (about twelve or thirteen years ago), I decided to try my hand at starting a manufacturing business. Why? I was in my 20’s, with an MBA and a few years of work experience under my belt, and I had a dream – to leave my mark on this world, to become the next Henry Ford or Steve Jobs, and I figured, if things go to hell, I was young enough to risk it and still have time to bounce back!

There is of course a lot more to this story and my thought process that lead to my decision, but this is not the point of this post. The point is, when you do decide to start a business there is this steep learning curve, and as the business is your own, there are a lot of factors that must be considered while making decisions. 

Many factors that must be considered while making decisions

Like me, if you came from the corporate world, still early in your career with limited managerial experience, you probably just had to look after a very specific task – sales, marketing, a small part of finance, etc. But when you are the head of your own business (no matter how small), you need to be involved in everything! Business Plan, Finance, Revenue, Marketing, Sales…

Strategic Management

When you have so much on your plate there is a risk of your dropping the plate and causing it to break into many tiny pieces (the “plate” here is your business :D).

Understanding how business works, the points to consider before making a decision, and knowing and correctly identifying the different sources of information on which to base your decisions is paramount for the success of your business. This is where strategic management takes on a whole new importance in your thought process. It does not matter how big or small your business/company is, start thinking strategically!! 

Think Strategically

Three principles underlying strategy: (1) Creating a “unique and valuable” [market] position (2) Making trade-offs by choosing “what not to do”, and (3) Creating “fit” by aligning company activities to one another to support the chosen strategy 

Prof. Michael E. Porter, Ph.D., Harvard Business School

The simplest definition of strategic management is “the formulation and implementation of the major goals and initiatives taken by an organisation’s top managers on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organisation operates.” Strategic management provides overall direction to a business and involves specifying the organisation’s objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans (source: Strategic Management for Voluntary Nonprofit Organizations, Roger Courtney).

A system of finding, formulating, and developing a doctrine that will ensure longterm success if followed faithfully.

Dr. Vladimir Kvint, Chair of the Department of Financial Strategy at the Moscow School of Economics of the Lomonosov Moscow State University

So, how do you go about making your life (business really) easier by implementing strategic management?

First, identify your goals – let’s say your goal is to increase annual sales, but what does that actually mean? It is just too vague. Quantify and be specific. As an example, our goal is to sell 100 ballpoint pens and 200 ink pens by the end of the next financial year.

Now, how do you go about achieving this goal?

  • Start by identifying what goods you are going to be manufacturing (in our example they are pens), then the market to which you will be selling these manufactured goods.
  • Next, organise the resources you will need to achieve your goals, like putting in place purchasing and supply chain management to ensure a timely supply of raw materials, people and equipment to carry out the manufacturing process, marketing and sales team to bring in clients, and employing or contracting an adequate support staff (if you are unable to do it yourself) to carry out other support functions.
  • There are also a number of external forces that can have an impact on your business strategy. One of the tools most used in understanding these forces and helping in developing a strategy is Michael E. Porter’s Five Forces Framework which is a business analysis model that helps explain why various industries are able to sustain different levels of profitability. The Five Forces model is widely used to analyse and determine the corporate strategy of a company.

Porter’s five forces are:

  • Competition in the industry
  • Potential of new entrants into the industry
  • Power of suppliers
  • Power of customers
  • Threat of substitute products
A graphical representation of Porter’s five forces

Understanding the principles behind strategic management might take time, but when it comes right down to it, you will find that it is basically logic. The challenge is in getting the right data from the right sources on which you can base your decisions, and of course the methodology you use to analyse the data to arrive at your decisions. A wrong strategic decision may end up costing you dearly.  

This is why strategy and strategic management is an important module in a number of our online master’s degree programmes. 

You can also chat LIVE on WhatsApp with one of our Education Advisors for more information on the programmes we offer, the application process, and for information on discounts we might be offering at this time.

5 ways to effectively manage virtual teams

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The pandemic has changed the way the world operates. It is essential that we go remote in order to flatten the curve and stop the spread of the novel corona virus. Working remotely may have started as a necessity and an ongoing trend but has become the new normal and is here to stay! While many of us had long dreamt of being able to work remotely (at least for a couple of days in a week), now are working from home every day. #WFH (Work from Home) is the way of the future workplace.  
 

The change has not only affected the corporate world, but the healthcare and education sectors alike. Clinics are now operating remotely with doctors taking online, rather than in-person consultations. Universities have moved their on-campus programmes to online programmes, with professors teaching classes and posting lectures online. Barring some essential service occupations or frontline jobs like emergency workers, retail stores, restaurants and hotels, banking, etc. (where not closed), everything else seems to have moved online.  
 

Most of the businesses have shifted their work online

Many corporates have realized that they actually don’t need workers to physically come to work. Jobs can be managed from home or from practically anywhere in the world. In last week’s blog, we saw how challenging it is to work from home and some useful tips on overcoming those challenges. Now imagine you are not only working from home, but also having to manage a team remotely as well! What a challenge! This has led to heightened responsibility and a greater role for the team leaders. Managers across industries are rapidly looking for new methods and techniques to manage their widely dispersed and distributed teams remotely.  

Managing virtual teams through video-conferencing

In the wake of these new challenges, business leaders are required to be all the more creative, focus on new means of communication, and be more inclusive. 

So, here are 5 ways that will help you, a new (or old) remote leader, manage your new remote team effectively: 

1. Set clear objectives and expectations 

      Studies show that most workers are not clear of what is expected of them at work. When working remotely this will become even more difficult if not handled properly. In order to encourage maximum participation and engagement from the employees, set clear agendas, norms and expectations with your team. Come to a common consensus as a group so that each employee is comfortable with the goals of the team.  

2. Communication is the Key 

    While working remotely, there is no such thing as over-communicating. It is rather “are you communicating enough”?! While in a normal office environment, a small miscommunication can cause trouble; imagine how haywire things can go when you are managing a team remotely. There are different teams cross functioning, with different perspectives that a leader has to handle at a time. Communicating constantly is an effective means to guide employees, and keeping them engaged and motivated.  

Choose the most effective means, amongst the various means of communication

3. Utilize various means of communication 

    Deriving from the above point, a leader needs to find effective means of communication. The pandemic has given us several alternate communication methods. Business leaders can adopt any of the many tools available like Microsoft Teams, video-conferring on Zoom, UberConference, more conventional Skype, texting, etc. A leader must determine when to use a video-conferencing tool to establish a more personalized conversation, or a quick audio-call or a buzz on Skype messenger for a quick follow up on the work status. This will also establish a norm for employees on how to interact and communicate effectively amongst themselves, and with the manager.  

4. Hold daily and regular check-ins 

    Working remotely might be a new experience for many of your workers. It can be overwhelming for some of them to adjust to this whole new work culture, where the workers are separated from their peers and managers. They might need help and support, but unlike in a normal office environment where they could go knock on their boss’s door or lean on co-worker’s cubicle, employees may not be able to find such instant support or comfort while working remotely. It is therefore necessary for the team managers to have regular check-ins, and one-on-one conversations with their team members. It is all the more important for them to empathize with the situation and hear out what challenges or issues their staff are facing and suggest appropriate solutions. 

A home office setup. #wfh is the new normal.

5. Empowering your employees 

    While working remotely, everyone is their own manager (well at least at their homes, and unless kids are around!). The team leader must tread very carefully before entrusting more responsibilities to the members. The managers must learn to trust and empower their employees. Encouraging a trust-based culture has proven to have an increase in innovation, agility, employee engagement and job satisfaction.  

Being an effective and innovative team leader is not everyone’s cup of tea and managing remotely comes with its own challenges. Keeping the above points in view, using the right tools with a high degree of emotional intelligence, and by adopting the best management practices, you can be an effective leader, and help your team thrive. For all the new remote managers, we trust that you’ve got this! Do share with us your own remote managing experience and challenges in the comments section below.