Why Risk Management Feels Like an Unnecessary Luxury —and How to Change That
Risk management is a buzzword. It’s the kind of thing people nod along to in meetings, knowing it’s important but unsure why. We’ve mastered survival in the face of chaos—whether it’s a sudden policy shift, hyperinflation, or power outages. Yet, for many business leaders, risk management feels like a distant, theoretical exercise, detached from the daily grind of putting out fires.
The Common Understanding of Risk Management
Here’s the truth: most organisations understand risk management as “something for big corporations” or an audit requirement, not a practical tool for success. It’s often reduced to a box-ticking exercise—policies drafted, documents filed, and then forgotten. Risk is seen as a problem to avoid, not an opportunity to seize.
But here’s the paradox: Businesses are already doing some form of risk management. You budget cautiously because you anticipate fuel price hikes. You diversify your suppliers because you expect disruptions. Yet, without a structured approach, these efforts often lack coherence and fail to deliver measurable value.
Why Risk Management Doesn’t Feel Valuable
The disconnect lies in how risk management is positioned. It’s often introduced as a bureaucratic burden rather than a business enabler. Leaders hear about risks but don’t see the direct impact of managing them effectively. Worse, when resources are scarce, spending on risk management feels like taking away from immediate, pressing needs.
Where adaptability is our superpower, the challenge is to show how a strategic risk management approach doesn’t just protect but propels businesses forward.
Implementing Risk Management: A Simple Approach
- Start Small and Relevant
Begin with what matters most. Identify the top three risks that could derail your business—currency fluctuations, unreliable supply chains, or power outages. Prioritize actions that address these risks first. - Make It Practical
Forget complex jargon. Use simple tools like a risk register or a bow tie analysis. Engage your team by asking, “What keeps you up at night?” and build your plan around those answers. - Integrate with Daily Operations
Risk management shouldn’t live in a separate binder. Tie it to everyday decisions. For instance, when planning your budget, include contingencies for unexpected costs. When negotiating contracts, embed clauses that mitigate risks like non-delivery. - Measure and Communicate Value
Track your wins. Did diversifying suppliers save you from stockouts during transport strikes? Share these successes with your team and stakeholders to reinforce the value of risk management.
The Challenges of Seeing Its Value
The biggest hurdle? Risk management doesn’t always deliver instant gratification. Unlike sales or marketing, its results are often invisible—disasters avoided, crises averted. In a fast-paced, high-pressure environment, it’s tempting to focus solely on immediate gains, sidelining long-term resilience.
Changing the Narrative
To make risk management resonate, we must shift the narrative from fear to empowerment.
- Showcase Success Stories: Highlight local businesses that have thrived by managing risks effectively.
- Make It Relatable: Connect risk management to everyday survival tactics already in practice.
- Train and Equip Leaders: Provide practical workshops, tools, and templates that demystify the process.
Risk management isn’t just about avoiding losses—it’s about seizing opportunities in uncertainty. In a country where volatility is the norm, businesses that master this will lead, not lag.