Five Steps to Better Risk Management

Risk management improves with keen observations. Try these five techniques over the next few months:

When reviewing your financial statements for your risk management audit, take a hard look at receivables aging. How are collections compared to last period and industry standards? Increased issues with receivables are a good indicator of future risk management problems.

Customers pay their priority vendors first. Are you slipping on their list? Is this a credit or production problem? Investigate thoroughly when slippage in receivables occurs.

Do not rely on communications rolling up hill. Interview middle managers and get thoughts on hazards, perils and general safety and risk management. Sometimes good ideas do not get passed along for a variety of reasons.

If your company does not have a safety committee, organize one. The CEO should be a member, but not the head or chair. All levels of employees and sectors of the company should be represented.

Interview a few committee members about what the nature of discussions are with non-member employees. Is the information received well? Are changes implemented on a timely basis? Is the feedback from non-members of the nature of wondering why something is not being done or fixed?

If you don’t have a plan, create one. Within this exercise, rethink the operation and how you would rebuild it. There is always room for improvement and your contingency plan might be a solid blueprint.

Ask the people involved with the process, they will have good ideas.

Listening is almost a lost skill. Interviewers and investigators have two ears and one mouth use them in that ratio. As a risk manager, improve your service by listening to everyone taking time to speak with you.

They do not get heard often and will pay you dividends for hearing.