Managing Risks Through An Understanding Of The Customer
When people say business, often one of the first associations we think of is the risk. It’s why a lot of people don’t work for themselves. The element of risk is a key factor because it’s our responsibility to manage it When we work for another person on a contract, we assume risk is negligible from our point of view. If we have no contract and it’s our job to raise our own revenue, the risk is not negligible at all. It drives the reasoning behind all of our actions.
Good business is about minimising risk into manageable and actionable portions. We can define the level of risk by how drastic the worse case would be if it happened. It’s a leader’s job to manipulate risk through actionable tasks and procedures so that worse cases do not affect the overall outcome. If we can manage risk well, then the odds of failure are reduced by large amounts. Identifying risk is a matter of experience and learning. We begin with the basics and fan out into situational matters from there.
The well-known phrase “don’t put all your eggs into one basket” describes neatly the concept of risk management. We have to consider our eggs and our baskets and spread them out as we are able to. The types of risk we encounter can be graded by how devastating they potentially are. Ignorable risk is the type of risk that only affects aesthetics or bonuses. They don’t really matter to the big picture but to have them work in your favour are nice. Nuisance risks are those things that you prefer to happen and if they don’t extra work will be needed to get the result you need. We don’t always have the time or money to implement the next step so we must prepare for the possibility of failure before we fail.
An insurable risk is that which affects the business negatively and yet contingency plans are in place to make sure everyone can carry on regardless. Not making enough money in a given time period or having a serious malfunction are insurable risks. We can take steps to ensure our progress and ensure everyone can remain at their post even if our cash flow takes a turn for the worse. Extinction level risk is that which we simply cannot insure against or recover from. This is a complete failure at every level of business and despite all the work and societal benefits, nothing is working and you have to fold.
So, clearly, for a business leader, the first task is to create a business that works. With a viable business plan and a beneficial purpose for customers to make use of — that can be shown to be effective, we know that we have managed the most serious type of risk. The rest can be managed too, but a good idea and an effective method are not enough to manage these smaller risks. The way customers behave will define how much risk is still involved. We need people to want to visit us, want to use our service, want to talk fondly about us and want to come back. These things are also important and we need this flow of people in order to maintain our business and create jobs.
The way businesses communicate with the public is called marketing. It doesn’t matter if you give them a free comic book or a blatant in-your-face advert. It’s all marketing. You need to choose the style of marketing you want to produce. Remember that people will identify your business by the type of communication you produce. It’s important to create a voice and style that reflects the customer. We can look at customer behaviour in order to determine how to design our marketing and communication. When we produce an advert, a logo, a special offer, or any form of marketing, we need to know that it speaks to the people we want to do business with.
The world is full of things. We notice only a small amount of what is around us. The more well-defined something is in our mind, the more we notice it. When we walk through the street, we will see paving slabs, houses, doors, street lights, everything we know the word for and the purpose of. We might not see the gradients or the pattern shapes or the wisps of ambient cloud or the microhabitats hiding in plain sight. Even these named things can be identified when we think of them. So much of the world is not named because it doesn’t have a definitive purpose or place. The jazz of the universe, the notes between the notes, is everything most of us simply pass by. We will find that our business is like this unless we can trigger mental activity with our marketing.
This means we have to look around us at what stands out in our field. Once we can identify a code of conduct that seems to marry everything together with design and communication, we can translate our own ideas into this subtle language. When speaking in the tone customers expect and showing the images customers are used to seeing, putting our own twist in the pot will be in the personality and schema of the communication. Understanding society around us will help us to mirror and build rapport with the right people who can bring custom through our door.