Monday, April 12, 2010

Planning for Success

Society is gradually becoming more and more risk-averse – children are being stopped from playing conkers or climbing trees for fear that they might hurt themselves, the annual cheese-rolling competition in Gloucestershire has been cancelled on health and safety grounds, and in the latest act of madness, Northamptonshire Police Force have delayed the introduction of bicycles for its officers until they have each received 10 hours of training.  

The same is true in business where managers are increasingly being encouraged to plan for the worst:  What if we fail?  How much contingency is there in the plan?  Have you completed a risk assessment?

Against this background it is not surprising that very little effort is dedicated to the risk of success.  But just as an unanticipated risk can cause more damage than an anticipated one, so an unanticipated opportunity can result in reduced profitability over one that was anticipated.

Indeed, since profit is, by definition, the reward for risk, it may even be that viewed in a different way, even the risks themselves may present new opportunities.

In the same way as large companies will have contingency plans for the outbreak of Swine Flu, for terrorist attacks or for what would happen if their head office burned down, should they not also dedicate a similar amount of effort to ensure that they are just as prepared if a major competitor went out of business or if demand increased significantly?

Click here to read the main article on the Extensor web site.

1 comment:

  1. This is so true.

    My company is paranoid about making mistakes but appears totally oblivious to the fact that the recession is creating fantastic opportunities as some of our closest competitors are closing offices and even going bust.

    I have forwarded a copy of your newsletter to my boss. Hopefully they will read it!