Why climbing Machu Picchu made me think about risks.
Many business owners don’t think enough about business risk. Considering risk in a simple, systematic way can help to improve your business.
Walking the Inca trail.
I was recently climbing the Inca trail in Peru. It’s a fantastic walk that takes you through cloud forest, to oversee ancient ruins and leaving you with incredible views throughout every day.
It’s all at high altitude, which can create problems; I nearly passed out on two separate occasions. Fortunately, one of the team had an oxygen canister handy, so everything ended well.
They had considered the risks and worked through a simple process to deal with them.
When did you last take an hour out to consider the potential risks to your business ? Many people haven’t updated that list in the last 3 years (how many new pieces of technology, new staff, new processes, new products, etc have you got in the last 3 years?). Can your plans work, if your staff don’t know them?
A simple risk management process to manage your business better.
1: Stop for a few minutes and think about the things that could go wrong, write down the first 10-15 that come to you.
2: Now think about 3-5 for each of the following categories, and add these to the list:
- Weather and environmental issues
- Technology (that’s not just “have you done a back up”)
- Any others specific to your industry?
3: List them in order of worry that they hold for you (there is a simple way of doing this outlined in one of our free downloads).
4: Think about the risks from a different angle; each of the following could suggest a different action:
- reactions from customers
- reactions from staff
- reactions from other stakeholders
5: Understand potential issues from these perspectives and mitigate the most serious. That is, either find:
- something to reduce the likelihood that it will occur
- something to reduce the seriousness of the problem
- or what you can do should it occur (contingency)
I wasn’t going to not climb the Inca trail (reduce the likelihood), I couldn’t reduce the seriousness of the problem of me passing out – but a simple fix (bottle of Oxygen) could mitigate it. The contingency plan was a canister of Oxygen.
If you have a plan to deal with the problem, should it occur –ensure you test it!! Click here to read about businesses that didn’t test their contingency plans.
How this improves your business.
By reducing the risks in the business in an appropriate way, you are making it more resilient and less likely to have problems. You might even be able to turn that fact into a marketing idea and sell more too. I was certainly glad that my guides had plenty of Oxygen and that it worked.
Our Peru trip was the latest in an annual series of hikes by a team of 10, that have met through networking. Mainly SME owners, the group also comprises senior bank manager, and a couple of other senior executives. This year we raised over £10k for charities, without asking anybody to pay for our places on the trip.
The trail itself was hard work, long days walking at altitude, but great fun. The views were stunning. One highlight for me was on the last morning, having been up for two hours we watched the sun rise through the sun gate to look down over Machu Picchu itself, a great morning – even if it did mean starting at 3:00