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Episode 10 addresses Risk Management – Part 2
This component of Risk Management focuses on making decisions and achieving strategic and business objectives. We discuss risk identification of new and emerging risks so that that timely and effective risk response can be achieved. Part 2 also covers monitoring performance and determining any changes that have occurred in the risk profile.
We point out that identification of new and emerging risk gives the business time to look at the future and assess the severity of potential risks. Factors that can impact strategy and business operations are listed. Accurate and precise identification of risk is important because it gives the management team time to assess the severity of the risk. It also helps businesses identify typical root causes and decide on the most appropriate risk response.
This episode covers the importance of monitoring risk management performance and factors to consider in performance measurement. By understanding the current and desired future state of risk management provides useful baseline information for improving efficiency and organizational effectiveness. By constantly monitoring, businesses will be able to take advantage of the opportunity improvements that best fit them.
Episode 9 addresses Risk Management – Part 1
Risk is something that can’t be avoided or completely be eliminated. No business can grow without taking risks. Peter Drucker, the famous management consultant, identified four types of business risk:
- Risk that is built into the very nature of the business and which cannot be avoided
- Risk that one can afford to take
- Risk one cannot afford to take
- Risk one cannot afford not to take
The key is having a process for balancing exposure to risk against opportunity with the goal of enhancing your capability to create, preserve, and realize value. Businesses have lots of choices in how it can apply the process of risk management.
The steps of accepting, avoiding, and pursuing risk will have the effect of analyzing business performance relative to the business strategy and objectives. The idea is to minimize variability in performance. Effective risk management allows businesses to identify possible risks and how to respond to them. However, the impact these risks can have on performance is tougher to manage. Effective management of risks relative to identified potential risks can cut down on performance variations.
Risk appetite is crucial since it provides a guide in determining the type and amount of risk the business is willing to accept. It’s important to realize that there is no right or wrong way to define risk appetite. You need to choose a risk appetite with full understanding of the trade-offs involved. Risk appetite can encompass a single description of the type and amount of risk or multiple scenarios of risk that support the vision and mission.
Episode 8 addresses Effective Change Management.
Making changes is always challenging. Change is a necessity for transforming your business by implementing new products or attracting new customers. Driving new business growth and adjusting to changes in the business culture will require adjustments and navigation. Episode 8 discusses creating high impact and high confrontation needed to achieve effective change.
There are three steps in creating high contrast:
- Focus on the core 20% of what’s different
- Enhance the descriptions between the old and the new
- Create visual images, pictures, of the old and the new in order to make the contrast more easily understood
There are two steps needed to create high-impact confrontation:
- Review the messages of the old and new maps repeatedly in your mind
- Create high-impact, inescapable confrontations
- Focus on what you think are the core contrasts
- Make sure to involve all five senses in visualizing the contrast
- Be sure to address the reality of the situation head on and right between your eyes
I thought it would be helpful to review the 8 steps of change which points out the action steps and the required new behavior.
Step 1: Increase Urgency – This is when people need to tell each other “let’s go, we need to change.
Step 2: Building the guiding team – Create a group powerful enough to guide change and get it organized.
Step 3: Get the vision right – The guiding team needs to develop the right vision.
Step 4: Communicate for buy-in – everyone needs to buy-in to the change.
Step 5: Empower action – Make sure people feel free to act, and act, on the vision.
Step 6: Create short-term wins – you will see momentum build as effort occurs on trying to fill the short-term vision.
Step 7: Don’t let up – it’s critical to make wave after wave of changes until you fulfill the vision.
Step 8: Make change stick – make sure that the new winning behavior continues.
The secret to achieving a change will almost always require a see-feel-change approach. The analysis-think-change method hardly ever works. It is essential to help people see which will hit on something new and trigger emotions. Emotionally charged ideas change behavior or will reinforce changed behavior.
Here is Part 2 of Problem Solving. Combine the two presentations and gain a good perspective on how to solve problems. Also, Check out my blog post on Problem Solving.
There are lots of different method of thinking which are covered in the podcast. These methods range from reflex thinking, knowledge based thinking, and scientific thinking. It really boils down to the pursuit of purpose by asking why and what for.
We explain the rules of brainstorming and how to achieve the most from this process. This includes keeping the problem clear and defined. Let it flow and come up with as many ideas as possible and write them down.
We cover the 12 steps of idea generation and how to use them effectively. Try to develop a relaxed state of mind and get a good night’s rest to replenish your mental energy.
Some improvement principles to consider include looking at how things are done:
- Eliminate unnecessary motion
- Realize that repetition makes it easier to perform tasks
- Simplify the work steps
- Take advantage of the tools that can make things easier
There will be lots of objections and reaction to new ideas. The best approach is to hear out all the objections. Put your focus on overcoming mental obstacles and separate the generation of ideas from judgment by following the cause and effect relationships and applying logic to reach conclusions and achieve improvement.
It is important there will be resistance to change and new approaches. Perception is 9/10ths of the law and you’ll have to overcome perception to achieve change and success.
This episode is Part 1 of Solving Problems. For those of you who are wondering about Episode 5, well I messed up and went to Episode 6. I just wanted to confuse everyone.
This is a two-part presentation on Solving Problems. Part 1 deals with the Problem-Solving Process. Part 2 addresses ideas for improvement and implementing those ideas.
The problem-solving process includes:
- Understanding the principles and concepts of analytical thinking
- Identifying problems (and capturing them)
- Generate ideas for improvement
- Make improvement happen
- Turn improvement into reality
- Create an environment implementing the solutions or improvements
Understand that Perception is Reality, I like to say its 9/10ths of the law. It’s never simple. There are various levels of division and this creates many opportunities which can be confusing. It is essential to understand and accept the various levels of variables and the complexity that is created.
Keep dividing things by two and explore all the possibilities. No two people will see the same details the same way. Always consider the complexities of reality when you are dividing things into two parts.
The Three Steps to Solving Problems
- Find the problem
- Clarify the problem
- Find the cause
Questions to Ask
- What do we know?
- What don’t we know?
Here are the Five Elements of Problems
Maintain a wide focus and consider the five elements of problems that include:
Here are some characteristics to consider.
Length, width, thickness, height, depth, weight, firmness, size, volume,angle, strength, slipperiness, viscosity, density, number, time, speed,wattage, temperature, humidity, ventilation, cost, price, quality, frequency of,use, taste, smell, odor, sound, half-life, efficiency, color.
Finally, give shape to a problem by writing down the details and carefully examining them. This will help you evaluate the size and gravity of a problem and put you on a fast track toward finding solutions.
In Part 2 will discuss ideas for improvement and how to implement them.
Here is where you can access Basics of Financial Management and the Small Business Road Map to Success.
If you’ll remember I messed up and somehow skipped Episode 5. Since we introduced the Strategic Thinking process in the Newsletter I thought it would be helpful to expand on the six-step process as a topic for Episode 5. This will help you understand strategic thinking and how it impacts strategic planning.
Strategic thinking is an essential element of creating success. It’s a never-ending process of evaluating what is happening now and what might happen in the future.
Strategic thinking starts with a vision of what a business will be and where it is headed. It sets a long-term direction and describes what the business is trying to become. Strategic thinking gives the business action steps to create a sense of purpose. It is the thinking that exists in the mind of the business owner or leader of the organization that shapes and clarifies the future of the business. Strategic thinking is the process of going from “now” to the “future.”
Here is the link to the booklet, Strategic Thinking and the Strategic Thinking Toolkit.
This episode introduces Building Business Value or BBV. It is a system that defines profitability in terms of return on capital and aims a specifically making sure that the return exceeds the cost of capital. It’s a back to basic approach that focuses on long-term results and utilizes common sense business concepts and financial management.
The system utilizes a 10-Step BBV Approach that determines and defines problems being faced by the business and how to address them. Here are the 10-Steps:
- Get to the point of Pain experienced by the business
- Scope out what needs to be done
- Orient the business to the reality of economic and market conditions
- Manage the scale of the business to fit current and future reality
- Structure debt to maximize cash flow
- Maximize assets to get the most bang for the buck
- Optimize products and services
- Improve employee effectiveness
- Improve productivity of the entity
- Change the right processes for the right reasons
The BBV system provides an essential approach to evaluating the health of a business and the steps for achieving peak performance. Every business should be asking themselves these questions and determining what action steps are needed to improve and increase the value of the business.
This episode describes the process of business coaching and what coaches provide to business owners. It spells out specifically what coaches do and how they can help and support business owners. The episode discusses the numerous challenges facing business owners and how coaches help them deal with them. Advisor support services that coaches can provide will vary and cover a wide variety of topics and issues. Business owners will learn how they can receive coaching support whenever and where they need it through the use of virtual tools. This is a time efficient and cost effective process. Finally, life-balance coaching is available in addition to just business and financial support. I have been well trained and am qualified in this area through associations with life coaches and sports psychologists combined with my own active life style.
This episode outlines the 5 Steps for Creating Success from dreams to vision and implementation. I also spell out the details of A Road Map for Small Business Success and Survival. The program outlines the 10-Step Business Approach for business improvement.
We’ll be providing regular episodes covering a wide range of topic focused on achieving success in business and in life. Our first episode will be available soon.