Risk Management Q&A

Speak with your lawyer.

Or you can use the processes in 

• AS/NZS ISO 31000-2009

While I agree with some of the points that Tim has made, such as delegation (both through additional hiring or retraining existing employees), I disagree with removing the business owner from the situation (unless that is their permanent exit strategy).

First, create a decision diagram to help quickly address issues that surface. I highly recommend approaching it from a “How will this item impact the business, today, next month, next year”. Many people forget the saying that “Your lack of planning does not constitute my emergency”. This may not apply to everything that comes up, but it can be applied to many situations.

Don’t let urgency impede true priority (reading and answering an email that just arrived may interrupt a more important task you are in the middle of - don’t let small things that are urgent steal from items with higher priority.

Identify tasks that you are willing to delegate based on specific criteria ( responding to a specific client, answering a question with a financial impact under a specific amount, resolving personnel disagreements or friction, etc.)

If the business truly is your business, removing yourself for months at a time for holiday leave may be enjoyable but it is not optimal. If you truly care about your business (hopefully you do) your presence whether for decision making and morale is crucial. An absent CEO or owner breeds animosity and mistrust from employees that label you as an absentee. Your decisions will be questioned as just benefiting you (versus the entire company) or worse others will think you are making snap decisions while being ill-informed.

Now, everyone needs time away to recharge and just stay mentally sharp, but you shouldn’t shrug off the responsibility of your position. Lead by example. Delegate to employees in a way that empowers them and shows them trust, but also shows them through words and actions that you take the important decisions with the weight they deserve.

I think it comes down to two things:
1.       No point of difference or unique selling proposition (USP)
2.       High overhead costs either from rapid expansion or poor financial planning
 
This applies to a lot of bankrupt retailers, regardless of what they sell.
Masters expanded too rapidly and couldn’t differentiate itself from the incumbent Bunnings, whether from price, customer experience or product line. Dick Smith had a lot of obsolete or unsold stock when they folded, which signals that they failed to keep up with consumer demand changes. If you asked consumers to describe Dick Smith in fewer than 10 words, many would struggle simply because Dick Smith had no USP.
 
It’s an important lesson to think about when you are starting a retail business nowadays, in this highly competitive environment – what is your USP?
 

A good start is reading 

• AS/NZS ISO 31000-2009