risk-management

Risk management can be an extremely difficult, but necessary business aspect. In order to complete projects quickly and accurately, the pros and cons of every decision must be weighed, and the financial costs of each should always be of the highest considerations. What many managers may come to find however, is that their personalities may directly correlate with exactly how much risk they are willing to take.

Depending on the industry you currently operate in, risk management may be more important to you than it is to others. For example, those in financing are much more keen on how and why their businesses’ money is spent. This brings forth the notion that no one style of risk management is wrong, but the way certain businesses function may determine what is best for their individual needs, and just how much risk they are willing to take.

To determine your level of risk tolerance, ask yourself what you and your business’s core values are and what you are willing to risk for the benefit of your company. Is your public persona important for your success? If so, you may be more inclined to play it safe to avoid having your reputation damaged. Do you favor boldness and perseverance? In that case, perhaps you are more willing to take bigger risks in order to stand for what you believe in. This translates to happiness in your position, and thus, success.

Be comfortable with every decision you make. If you are directly in charge of making any decision involving risk and are not comfortable following through with the plan, don’t be afraid to speak your mind. There may have been a few details that fell through the cracks that are worth checking again. Over time, you will learn which situations you are most comfortable taking risks in, and those that you are not.

For those of you that did not have a say in establishing your company’s core values, be sure to assess them before accepting a job at said business. If you are in the department of risk management, your tolerance may be significantly lowered when faced with decisions that you know are for the betterment of the company. Incorporating your personal feelings in these situations can harm your reputation as a trustworthy employee.

Overall, know what your business stands for and how willing you or your company is to take risks. The financing and insurance industries are much less likely to test the waters, whereas entrepreneurs and startup companies are much more likely to do so. What your goal as a risk manager should be is to find a work environment best suited to your values and capabilities.