Risk management involves identifying, defining, assessing and prioritizing risks in relation to an organization's activities. It is the implementation of strategies to mitigate regular or exceptional risks in the company's activities in order to reduce the organization's vulnerability and ensure business continuity. Risks must be identified according to their severity level and probability in a matrix. The higher their level, the more robust the mitigation plan must be.

The main risks must be identified and game plans must be developed to address them. These action plans must be shared and communicated to managers and employees. Once identified, these risks must be positioned in a risk matrix to determine their probabilities and consequences on the organization.

Risks identified with a PRIORITY 1 must be addressed and those with a PRIORITY 2 must be addressed according to their costs and impacts.

As for those identified as PRIORITY 3 , we will deal with those with a high probability or those having a serious consequence on the organization.

It should be remembered that risk management has a cost for an organization and that these must be assessed when implementing mitigation plans.

Here are some of the risks we have identified as a result of the pandemic. It should be noted that these are not the only ones to be taken into account in a risk management program. Each company and industry has its own specificities and it is necessary to know your organization and sector well to carry out good risk management.

Customers and traffic

You need to identify changes in customer needs for your products and services. Is your customer experience the same? Have you had to change it significantly in order to deliver your value proposition?

value? What is the level of dependence on certain customers?

Suppliers and procurement

The pandemic is global and many suppliers will not survive the crisis. Have you identified your strategic suppliers? Those that give you a competitive advantage, or that add value to your product/service? Have you identified alternative suppliers? What will you do if your supplier no longer exists or your product is not available? Do you have a level of dependency on a supplier?

Operations and quality

Do the changes you are making to comply with new occupational health and safety standards impact the quality of your products and services? Do they impact your supply chain, logistics or production?

Logistics and supply

The current health crisis has shown that there are often significant delays in deliveries. There are also many goods out of stock. Have you put procedures in place to get around this problem? Have you changed your order points? Do you have to order more? Do you need more storage space?

Human resources and expertise

The labor shortage and the pandemic have created plenty of opportunities in the job market and generated fears and reflections among people. Many employees will not return to work, regardless of the reason. The loss of some employees can be catastrophic for an organization, because they leave with expertise that will be difficult to replace.

Have you identified your level of dependency on certain employees? If so, do you have a game plan to ensure the transfer of expertise and knowledge? Do you have a game plan to do mass recruitment if you lose a lot of employees?

Financial risk

For many organizations, liquidity and cash flow management is the lifeblood of many organizations. Forecasting cash flows and liquidity is a critical activity that is essential to the survival of many organizations.

What is your current cash flow level? Do you know your monthly cash flow? What is your debt level? How much do you have to repay each month on your loan? Do you have the capacity to borrow to face a risk that may occur? Have you taken advantage of all possible subsidies? What is the impact of the exchange rate on your organization? What is the impact of inflation?

Contamination and quarantine

New health and safety regulations at work require new safety measures to be put in place for employees, customers and any other stakeholders. Despite this, it is possible that some people may become infected and contaminate other employees.

Do you have an action plan to react in such a situation? What will happen if you have to quarantine your staff: will you have to close the business?

Information technology

Unfortunately, crises of this magnitude often serve as opportunities for hackers. There is a significant increase in hacking of computer systems and data theft. What will you do if this happens to you? What if a ransom is demanded? How will you manage the media and reduce your reputational risk?

Teleworking also brings new ways of doing things and this has a significant impact on the IT aspects of the organization. What about information confidentiality and file security? Is access to your sites, systems and information well protected? How will you proceed with sharing files, computers, printers and other equipment?

In summary, risk management allows:

1. To identify the risks specific to your business and the industry in which you operate;

2. To assess your risks: their level of severity and their potential probability;

3. To be prepared for all eventualities so as to be able to better face them if they arise.

Upstream management is key! And as an entrepreneur, it is your responsibility to ensure sound governance. The survival of your business depends on it.