Strategic Planning and Risk Management is how you can increase your chance of success and increase the value of your organization.
Small and medium sized businesses are often too busy running the day-to-day operations to stop and plan for the future. The owner has a vision in their mind of what they want the future of their company to look like but they take little time to plan for that vision. It was pointed out in a recent Globe and Mail article that businesses that create formal strategic plans increase their chance of success by 30 to 50 percent.
The creation of a strategic plan is the first step to getting that vision out of the head and committing it to paper. The plan doesn’t have to be elaborate as long as it starts with clear and concise goals. If you are unsure of your goals, ask yourself the following two questions: 1) How will I know when I reach the goal? and; 2) How will I prove that I’ve reached the goal?
If you can answer these two questions you have clearly defined your goals. The next step is to identify what strategies you will use to reach each goal. What actions will you have to take in order to make the goals a reality? These are the basic building blocks of your strategic plan.
With your strategic plan in place you can now increase value. By employing the tools of Enterprise Risk Management (ERM) and by performing a Risk Assessment against the goals you will identify how risk can affect your plan. A Risk Assessment can help you understand the structures and processes of your company and how they can impact the strategic goals. Unpleasant business surprises, or risk events, can be managed and prevented if a proactive approach is taken and mitigation plans are implemented.
By adding strategic planning you increase your chances of success by 30% to 50%. By implementing an ERM program alongside your strategic plan you start to increase the value of your company, building that vision in reality.
The tools of large businesses are available to small and medium sized businesses. The same commitment applied to start a company needs to be employed to ensure its success. By adding the tools of strategic planning and enterprise risk management to your business arsenal, you will increase your chance of success and reduce risk.
Author: Kelland Sewell
Director of Canadian Operations, rPM3 Solutions Canada Inc
The Valuation Implications of Enterprise Risk Management Maturity. / Farrell, Mark; Gallagher, Ronan. In: The Journal of Risk and Insurance, Vol. 82, No. 3, 09.2015, p. 625-657. Research output: Contribution to journal › Article.