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What Peanut Butter Can Teach Your About Your Business
I gasped as I read the news about a peanut butter recall and I thought to myself: “Thank goodness that’s not me.” In a past life, I was faced with such a crisis for which we mitigated a significant event, but I never wanted to go through that again. Yet, some senior leaders are aware there are inherent risks in their business, but de-prioritize work to avoid such an issue because they think “That will never happen to us”… and then the unexpected happens. Let me remind you of the 1993 Jack in the Box E.coli outbreak that killed 4 children and infected 732 people and the impact it made on so many lives.
Why do C-Suite leaders take the knowledge provided by their subject matter experts and not act on those risks? Some leaders choose to ignore the risk because they don’t give much credibility to the people they hire to highlight those risks. To them it’s just noise and they don’t feel the pain yet. For some leaders, funding or resources could be an issue for which they may defer to invest hoping that time is their friend. Wise leaders may seek mitigating actions to lessen the risk until funds or resources can be applied. The sad truth is when you roll the dice and the risk becomes a reality, leaders take the victim’s position and ask a naive question: “How could this have happened?”
The peanut butter recall is the tip of the iceberg. This is what got out and potentially negatively impacted people or at the least a significant inconvenience. This is all serious, but do people realize how serious? What about all those small risks that exist in our businesses for which we hope our systems don’t let bad things into the market and impact our customers? However, are we sure that all systems are always working and there is no risk?
I know leaders must make decisions everyday based on the information at hand and making the best decisions possible that support people, the business, the community, shareholders and consumers. It’s a daunting job they face everyday, but what could be done now to be more sure tomorrow than you were today that you’re not the next peanut butter story in the news. Not everyone makes peanut butter, but we all make decisions in our business everyday and provide products or services to our customers.
Framework for avoiding risk in your business
- Ask the 3 most important people about where there is risk. Ask yourself, ask your team and ask an advisor. You already know 80% of the risk, your team another 15% but that 5% from an external view may be the one that bites you if you don’t know it’s there.
- Qualify & Quantify the risks in your business that will drive action. Unless it’s documented, prioritized and assigned an action, you’re following yourself that you have a risk mitigation plan.
- Pressure test the risk and make sure all your controls perform as expected, rinse and repeat. As leaders, we need to trust but also verify your controls are effective. Find a way test your systems vs. auditing or simply relying on data. Taking a blind eye to what is lurking below can be your biggest mistake.
- Be the leader that your consumer needs you to be. Make sure you can see your end consumer and picture the worst thing that can happen if you don’t mitigate the risk. It could be as small as the battery running out on a toy for which you visualize a child crying due to disappointment. A better leader is the one that can visualize the child who is run to the hospital because the battery broke and injured the child. The child needed you to be the leader and avoid the risk. If you didn’t mitigate the risk, you need to ask yourself if you should be a leader.
The next step is up to you. It may sound simple and you have “people” that take care of this for you. But are there experts in your care that have been escalating risk, but you’ve not been listening or taking serious action? Do they know how to articulate what is really a risk vs noise and how can you help them to give you the information you need to make good decisions? All of this takes time and I could be a resource for you to help you to look at your business and be sure you are not the next peanut butter story to hit the news.
If you would like to download your own copy of the framework for avoiding risk in your business click here.
Resources
Good Reads
Individual Advantages: Find the I in Team by Brian Smith – I’m reading this book right now and can’t wait to get into the details. I’ve met the author and I’m connecting again in June to share what I learned from it. The core of this is that we rise to our leadership roles because of the hard work we do. But the greatest legacy we can leave is to work with our teams and elevate them for a lasting impact. We need to find the true gift that we or “I” have as our advantage to move people.
Good Music
Megan Wofford – Awake – I’ve always been averse to risk and never took chances. However, with maturity, taking a risk is what can propel you forward. So I know the article I wrote can be a bit scary, but there is an upside to risk, especially investing in yourself. Lately, in building my business I’ve been taking calculated risks for which I’m starting to see the fruits of my efforts. This piece called “Awake” is smooth and reassuring that life has a way of smoothing things out if you take the right calculated risks.
Good Advice
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