Project Management for SMEs by 'Debo Ajayi - 3

Hello all,

How has your week been?

Yeah. Today we will wrap up the conversation about Risk, and how it can be managed to become a useful tool for business success.

Remember that we said that a Risk event is any event with a degree of uncertainty. As long as we do not know if, when or how something will happen, there exists a major challenge for SMEs.

Planning is a critical success factor and risk makes planning with any degree of accuracy difficult.

Positive ways to handle risks are

1. Share

2. Enhance

3. Exploit

Share

To share is to look for ways to improve your odds on a Project. Ever heard of the phrase "divide and conquer?". That's the logic of share. We want to increase the opportunity for success by sharing. Sharing comes in different forms and modes. One of which is to split up the business into different sections and focus on small bits. 

Focus always increases the chance for success. Another dimension to sharing is to sell the same product twice, changing either the package, brand or target market. Many manufacturers engage in this. Many drinks are now sold both in glass bottles, plastic bottles and cans. This is a classic example of sharing. The chance to succeed greatly increases because the product has been split into segments (even though it is the same product)

Source: http://i3advantage.com/blog/

Enhance

Next approach is to Enhance. To enhance is to take a bigger risk. Say you want to launch a new product/ service and as always you do not know certainly the outcome, you enhance by releasing two products into the market. The opportunity to succeed increases nicely in this event.

Exploit 

To exploit is to "throw everything you have at an opportunity". To look for ways to do more. The past outbreak of EVD (popularly called Ebola) created the opportunity for the sales of hand sanitizers. Now that the epidemic is over (thank God) to exploit will be to start/continue selling sanitizer but to create an aggressive marketing plan and focus on institutional buyers like Hospitals, hotels and public buildings.

Risk can be a very interesting concept and those who can weight it properly and take informed decisions are usually way ahead of the pack.

'Debo Ajayi
deboajayi1@gmail.com
debo.ajayi@endiveprojects.com
+2348030789445
+2348095763213
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Project Management for SMEs by 'Debo Ajayi - 2

Hello,

How was your week?

So we will continue where we left of last week. 

We were considering how Risk affects a business...we also said that risk wasn't always a negative thing (yes risk can be very good for business)

We are looking at ways to handle risk when it comes to using it as a tool to generate better business results.

So we mentioned that there are 2 broad ways risks can be handled. When  we have a negative risk (also called threats) we handle them by using any of 3 techniques...

Accept, Transfer, Mitigate

Transfer:

To transfer risk is to give to risk to another entity or business. This concept is best explained with buying insurance. What we do when we purchase Insurance is that we transfer our risk to another business....please consider this for a minute....risk is the foundation of an industry called insurance that deals in billions of dollars worldwide...

Transferring risk shields you and your organization from the threat that a risk possesses.
I must mention that transferring a risk doesn't necessarily make you immune to the risk, what it does is that is shields you directly from the impact of such a risk.

The 3rd response to a negative risk is 

Mitigate:

Mitigation is a proactive strategy designed in case a risk event occurs.
This means that the risk should have been anticipated and a strategy decided in case the risk event occurs. What I have learnt about performing brainstorming sessions to predict risk events and also to design responses is that it prepares an organization for any scenario.

This preparation helps the organization not just in event of any such risk events, but gives the organization a strategy for survival. This idea is vital to long term success. I have since learnt that in business the only guarantee of success is a decision to succeed. A determination never to go back, look back or think back....

Businesses need to expect the best but prepare for the worst...

expect the best but be prepared for the worst (clipped to polyvore.com)

Please have your say...

You can mail me -  deboajayi1@gmail.com