Risk is Your Business

"Risk is Our Business." - James T. Kirk

https://www.youtube.com/watch?v=toG6aSQFF7Y

Risk is your business too. To create wealth you have to take advantage of opportunities. That involves risk, making decisions, executing plans and seeing the results.

Customer complaints, reviews and returns are obvious expectations in retail world. Have plans how to nicely handle these requests. Even Costco did have to limit returns to one year to control costs.

Quality Issues. Nothing is ever made perfectly. Have processes and procedures to repair or dispose of defective parts or units. Often cheaper to scrap and make new units than to repair.

Planning. New products, services and improvements just don’t happen. Ideas are created. Opinions sought. Market research is done. Product costs are estimated. Advertising is created. People get trained in usage and to answer customer questions.

Risk Mitigation. If you are developing new technology or software, it is common to test concepts, test prototypes, test subsystems, test systems, and test the first production units. You want to minimize surprises and maximize sales.

Savings. To invest most businesses must have saved money from operations, and borrowed more from investor’s savings. Savings are used to create growth.

Insurance. Everyone needs insurance to spread risk. Insurance companies often help with prevention, and then help when losses occur. Have you updated and expanded your coverage as your wealth grows. You will need more insurance.

Risk acceptance. Not everything can be anticipated. Surprises happen, shipments get lost, equipment breaks, people sue without reason and Murphy’s Law applies. Businesses have to accept a certain percentage of losses.

Life Risks. We fall in love, have children and grow older and wiser. Friend and family age and have illnesses. There is no life without risks.  Go out and live your life today. Live long and prosper.

Better way to manage your teams - Ask Better Questions

Doug Krug (http://elsolutions.com/) is challenging my focus on problem solving. He teaches managers to Ask Better Questions.

1.     “What is working now?” “Where are we already getting the result(s) we want?”

2.     “What is causing the results we are getting?”

3.     Re-clarify the desired outcome with questions like, “What is the goal/objective we want to accomplish?”

4.     “What will be the benefit(s) when we achieve the goal or outcome?” Or, “What will be the cost if we don’t achieve our goal?”

5.     “What can we do more of, better or differently to get closer to the goal?”

Instead of starting with "What is the problem?", start positive and build on what already works. It focuses your team to build on strengths and look for more ideas to combine.

Results come much faster. 

Concern - Will America Keep Taking Risks?

Everyone has seen the news about the Deep Horizon oil platform exploding, burning and sinking in the Gulf of Mexico. The large oil spill is very memorable, and the news stories are telling about the people who will be negatively affected by the large oil spill. Very heart wrenching.

In addition British Petroleum is getting ripped in the press as everything from incompetent to evil money makers. BP is responding announcing they are doing everything they can to clean up the problem, and will pay for all the damages. Properly so, I may add.

The real question is what will happen long term? Is this going to be like Three Mile Island accident, where the nuclear industry fell behind the rest of world in developing nuclear energy? Think about it. One accident caused a whole industry to stop in its tracks over 30 years ago. Almost no new plants have been built for three decades.

What is the result? Most of the technology has moved to other countries. Canada and France develop much more nuclear electricity than we do. The other scary side effect is these plants were designed to be replaced after 25 to 30 years and then replaced by modern plants. We have

Will one oil spill stop more drilling and exploration? Will the US be more dependent on imports to provide the gasoline and diesel for our cars and trucks. Most of us drive cars, and all of us buy groceries and goods delivered by trucks. Are we going to stop producing energy we need to complete in a global economy?

There are over 30,000 drilling platforms in the Gulf of Mexico. There are plenty of opportunities for more accidents and oil spills. Are we going to stop driving and eating? No. We can not stop taking reasonable risks.

Our military is trained in taking risks. They professionally get in harms way and fight enemies who would love to kill them. We don't see them hiding in a military base in the US. We see our men and women all over the world in the worst conditions performing admirably. They do it by preparing for the risks and using training to overcome.

The US has to keep drilling for oil as well as developing alternatives. This will take decades to resolve. In the meantime talented men and women will come up with solutions to these problems and improve processes to make them safe. We must continue to develop energy and take risks to succeed.

Meantime our prayers are with the families of the lost and the injured from the accident.
Steve