Risk Management: How A Smart Entrepreneur Can Efficiently Manage Unfortunate Events

Risk management is referred as the identification, evaluation and prioritization of risks that a business faces, including impact

Risk management is referred as the identification, evaluation and prioritization of risks that a business faces, including impact of unfortunate events, as well as the maximization of opportunities [Sadgrove, 2016]. The main target of risk management is to identify potential problems of a business before they are maximized, so that specific activities may be planned to minimize potential negative impact. Risk management should be a continuous process for a business, addressing issues to effectively anticipate and mitigate the possible risks [Haimes, 2015]. A risk management process must consider both internal and external sources for cost, schedule and technical risk. Early detection of a risk by a business is vital, since it is less costly, as well as less disruptive to make the appropriate changes. Risk management is divided into three parts, including the adoption of risk management strategies, the identification and analysis of possible risks, by taking into account a risk management policy, as well as a risk assessment methodology and the business risks management with the implementation of risk mitigation plans, as well as studying risk analytics [Booth, 2015], [Savikhin, 2013].

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The future challenges and objectives of risk management are vital for a business in the social media, as well as in the emerging Web and mobile applications era [accenture]. Many businesses adopt social media strategies, exploiting Web applications (e.g. blogs) for marketing purposes to increase Web site traffic and attract qualified leads. By this way, new risks have emerged that businesses need to understand and effectively manage. Reputational risk is a vital issue that a business must consider, when taking into account social media for digital marketing purposes. A negative post can quickly result to more customers’ complaints and generate a harmful reputation of a business brand name for the wrong reasons [raconteur].

Several risk management tools are available today for a business to handle such challenges. Indicative ones include Resolver, Ideagen and Gensuite. Resolver is a risk management software that supports response and recovery processes, when an event occurs. Business risk management process of this tool also include identification of risks to achieve the requested objectives, as well as compliance management to achieve comprehensive, efficient compliance within fluid regulatory environments, if content and technology strategies offer flexibility to readily adapt [Resolver]. Ideagen offers software solutions for business risk management. Such solutions offer rich features and instruments to identify, assess, evaluate, treat and monitor both hazard and opportunity risks across businesses. Gensuite is a cloud-based compliance & risk management tool for sustainability, compliance, quality, sourcing and security processes.

Even if there are many software solutions that can be exploited by a business for basic risk management issues, social media monitoring is an ultimate service that a smart entrepreneur can use to efficiently manage unfortunate events, especially for the future social media and Web services era. More specifically, social media monitoring enables to instantly identify and track any conversation on the Web, social media, blogs, forums etc. By following such a process, a business is able to track vital discussions that may have an effect on the brand and its online reputation. The analysis of potential threats is vital for a business to act proactively, before a severe affect take place. In this direction, the use of social media monitoring is important to be exploited, by setting up queries to track topics related to the risk that a business wish to avoid. This will help to proactively manage potential problems, by tracking related parties associated with such specific queries. In this way, a business may observe any possible misuse of brand identity, as well as attempts to harm its reputation.

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In addition, a social media monitoring service is able to support a logical workflow to alert agents in a business, towards taking action, in case that this is needed and real-time alerts to foster immediate engagement. It also supports this ability to evaluate the results of social media and online marketing activities. This service is essential for an effective social media strategy and reputation management of a business. It can help entrepreneurs to overcome challenges of difficult business decisions, by analyzing social media metrics reporting. Such service is also socially intelligent to track a business online presence through detailed data analysis. Social media monitoring can be efficiently provided through a Software-as-a-Service (SaaS), by exploiting several online tools, like Brandwatch, Mention and Sprout. Such tools enable entrepreneurs to identify their business risks and effectively manage them to avoid a harmful brand reputation. By using a social media monitoring tool like one of them, businesses are able to have available a huge number of data, regarding their online reputation to identify better a possible risk, taking efficient management decisions. Tools like them continues to change the way that businesses approach risk analysis and brand reputation management. They are the ultimate SaaS applications for smart entrepreneurs to efficiently manage unfortunate events, regarding their business.

References:

[1] Sadgrove, K. (2016). The complete guide to business risk management. Routledge.

[2] Haimes, Y. Y. (2015). Risk modeling, assessment, and management. John Wiley & Sons.

[3] Booth, S. A. (2015). Crisis management strategy: Competition and change in modern enterprises. Routledge.

[4] Savikhin, A. C. (2013). The Application of Visual Analytics to Financial Decision-Making and Risk Management: Notes from Behavioural Economics. In Financial Analysis and Risk Management (pp. 99-114). Springer Berlin Heidelberg.

[5] https://www.accenture.com/us-en/insight-comprehensive-approach-managing-social-media-risk

[6] http://raconteur.net/business/reputational-risk-in-the-social-media-age

[7] http://www.resolver.com/blog/managing-reputational-risk-social-media/

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About Manos Perakakis

Manos is the co-founder of Mentionlytics. He has a PhD from Brunel University in User Experience and HCI. Also, he has also been teaching Digital Marketing and Web Design to Bachelor degree students for the past 9 years, as a lecturer in Hellenic Mediterranean University. • Follow Manos on TwitterCheck Manos on Linkedin