Every business faces risks. Data breaches and other cybersecurity incidents, potential financial losses, and damaged brand reputations represent a few. Worsening economic conditions and new government regulations that restrict or change your company’s operations are some more.
Effectively managing risk and security is part of what makes a business successful. Having a plan and implementing it well helps any organization reduce or avoid its obstacles. Here are some tips on improving risk management and security for your business.
Implement Governance, Risk, and Compliance Solutions
Governance, risk, and compliance, or GRC, is an internal, strategic approach to risk management. It’s actually three strategies in one that aligns your company’s objectives with information security and risk management programs. GRC looks at your company’s processes, technologies, and information security threats.
The goal is to find ways to improve your internal processes, effectively manage the technology you’re using, and reduce risks. Centralized GRC platforms and solutions help bring all three of these pieces together.
Employees throughout your company can keep up with changing regulations and compliance standards. Transparency increases, breaking down information silos between departments. Everyone engages in more informed, ethical, and secure practices.
A GRC tool can also help your business prevent non-compliance audits and cybersecurity threats. The cost of data breaches can extend far beyond the initial aftermath — penalties and settlements may be just the beginning.
If the public loses trust in your company and its practices, it might take years to get it back. You can improve your defense strategy by knowing what cybersecurity risks exist. Prevention and mitigation are often less expensive than cleanup.
Identify Priorities and Risk Severity Levels
Not all risks are created equal. You don’t have as much to lose when you buy a new TV versus a house. Your business faces similar choices and scenarios where potential threat levels vary. For example, expanding your production facilities overseas carries more risk than moving operations to a different state.
Likewise, there’s an increased chance your production facilities will sustain damage from hurricanes if you’re located in South Florida. However, that chance is nearly nonexistent when you operate out of Montana.
A good risk assessment plan lists and analyzes each threat a company is likely to face. But a great plan assesses the likelihood of each of those threats happening and their severity.
A great strategy also prioritizes mitigation efforts toward risks at the top of the list, as these are likely to do the most damage. A risk assessment matrix helps you visually plot and assess business risks according to probability and severity. Potentially catastrophic or critical risks that are extremely likely to occur become top priorities. Low priorities are unlikely threats with few to no consequences.
Choose Response Approaches for Each Risk
Risk management strategies can include different approaches to various threats or potential roadblocks. Your business may decide to avoid some risks as a strategy while mitigating or reducing others. You can also transfer threats to a third party, such as an insurance provider. Another approach is to accept or tolerate the risk while monitoring it.
Your strategy for each risk will depend on its probability and potential consequences. You’re probably not going to tolerate a threat that could shut your business down. However, as a retail store, you may decide it’s best to accept but reduce the risk of product theft. You recognize it’s part of being in business, while implementing monitoring measures like cameras and plain-clothes security officers.
On the other hand, you might want to transfer some of your likely risks to insurance providers. Hazard and liability policies help protect against financial loss due to slips and falls in your parking lot, for instance. You might also take out product liability coverage to protect against lawsuits claiming damages from using your company’s products.
Implementing cybersecurity measures is an example of risk reduction or mitigation. This approach is usually best for high-stakes threats your business can’t avoid. However, avoidance is a strategy for obstacles and hazards that are too damaging or costly to handle. For example, you might decide not to acquire a company with a reputation problem and a shrinking customer base.
Keep Monitoring What You’re Doing
Once you implement a risk management strategy, the assessment process isn’t over. You’ve got to stay vigilant about your strategy’s effectiveness. Are new processes and business practices working and closing previous security gaps? And have those procedures exposed or created any fresh concerns?
Some businesses choose to designate monitoring responsibilities to a separate department or team. This can establish centralized control and accountability. However, you can also employ an internal approach that’s more decentralized.
Each department’s leader can oversee the parts of the risk management strategy that apply to their area. Other organizations hand over the monitoring and review process to external vendors. This can help uncover concerns that employees overlook.
Whichever tack you take, it’s also critical to conduct risk management training. Continuous training helps staff stay engaged in the process. Plus, incorporating training can correct current knowledge gaps while helping employees recognize future threats.
Managing Business Risks
Some perils are just part of doing business. A stock brokerage will experience losses when the market dives; a golf course will lose business when it hails.
While you can’t avoid them all, you also can’t let things get out of control. Otherwise, the most severe and frequent dangers your business will face can be the reason you close up shop. But with comprehensive tools and the right strategies, your company can protect itself from a risky world.