How can businesses calculate an acceptable level of risk?


In the Chancellor's Winter Plan yesterday, Rishi Sunak announced that his new measures should help businesses to operate "without fear". At a time when businesses are facing challenge after challenge as the Coronavirus continues to impact the economy, Sunak's confidence may push firms to explore new ventures.


But how much risk is too much? Gareth Tennant of The Future Strategy Club (https://futurestrategyclub.com) - a lean and transparent agency with access to the highest calibre of freelance talent - is an expert in building business strategy and particularly helping them incorporate risk planning and mitigation in the day-to-day operations.


In a time when business leaders must step up to embrace the risks presented by the COVID pandemic, Gareth's expertise has never been more relevant. Now, through his work with the FSC, he shares his experience with business leaders looking to drive their firms out of a potential second lockdown:

"The physical hardship, austere conditions and deafening noise of combat is a long way from the sharp suits and lattes of the City, but I’m continually struck by the parallels between the challenges of business with those we faced on combat operations. Perhaps now as the country and, indeed, the world begins to come to terms with the realities of a post-COVID economy, the hard-fought lessons of military operations may be of value.


Business leaders surveying the uncertainty of the current business landscape, like military commanders thrust into a new theatre of operations must learn environment.  Strategies cannot be fixed plans, but instead must provide explicit and well-defined objectives along with clear guidance about the boundaries and limits of delegated decision-making. This will allow for adaptability as they learn and grow. Leaders will need to build resilience in their organisations through a combination of contingency planning, mitigating the effect of Taleb’s ‘black swans’, and feedback loops for learning lessons. The most successful businesses, like the most successful soldiers, will not be the strongest or the most disciplined. But those who are humble enough to learn from their mistakes, quickly adapt to their environment and through their actions begin to even shape it and through guile, cunning and tenacity to turn change into opportunity.


My key piece of advice is that leaders should remember not to let their guard down and return to business as usual. Instead, think about the range of potential risks and build up the muscle memory to adapt to potential changes."

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