If you earn a living as an operations manager, then you’ll spend much of your time having to quantify risks. There are certain kinds of risk, however, that we’re naturally inclined to discount. This failure can have disastrous long-term consequences, even if the risks themselves are less than obvious.
Let’s take a look at a few common categories of operational risk, and establish the threat that they pose.
Over-Reliance on Manual Processes
If your operations require constant input from human beings, then the chances are good that they aren’t as efficient as they otherwise might be. Automation can often lead to massive productivity gains, and make possible workflows that would otherwise be nonviable.
Weak Supply Chain or Vendor Oversight
When your business is part of a supply chain, it can be vulnerable to disruption. If a natural disaster in a foreign country makes it impossible to source business-critical materials and components, then your business might struggle to recover. Good risk management should involve preparing for this possibility, and taking steps to reduce the impact.
Ignoring Cybersecurity Vulnerabilities
Cybersecurity is something that all digital businesses should take seriously, especially if they make use of hybrid or entirely remote workers. Specific measures, like password managers and multi-factor authentication, can be consequential. Entrusting business-critical services to specialist organisations can also be worthwhile. Managed firewall services, for example, might protect your business even when there’s no one in the office.
Poor Documentation and Knowledge Transfer
What if your processes and procedures aren’t properly documented, and there’s no centralised repository of information that might allow members of your organisation to understand what the proper course of action should be in a given situation? The result can be a lack of joined-up thinking, and a considerable amount of wasted attention and energy. When one part of the business possesses key skills and information, it should be able to easily communicate that information to other parts of the business.
Inadequate Staff Training and Skill Gaps
Sometimes, a more general lack of expertise can be a source of risk. For example, you might think of the ability of the average worker to spot a malicious phishing email, and to refrain from clicking on the link attached to it. Providing regular refresher training in certain essential concepts can help your staff perform as they should.
Failure to Review Business Continuity Plans Regularly
What happens when the person at the very top of your organisation decides that they’d like to move on, or to retire? How will the business cope with the ensuing period of transition? If your business doesn’t regularly reflect on the possibilities, then it might face an existential crisis when this situation does arise. For this reason, continuity plans should be regularly reviewed. In smaller family-run businesses, this is particularly important.