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Protect your company from negative surprises

2 min read


This post is by Neil Giarratana, author of “CEO Priorities: Master the Art of Surviving at the Top.”

Imagine this scenario: You are the CEO of a company, and  your business is doing well. You’ve been making the rounds, visiting media for interviews and sharing great news with your people.

But there is potential in every discipline within your company to knock you off course. Some of these problems might already be known to you or your managers but, in the rush of business, receive only cursory or sporadic attention.

The solution: Accept that mistakes are going happen — then institutionalize that fact within your company and its activities. No business year, no quarter, no plan is going to be executed without risks and pitfalls that could come back to bite you and the company when you least want them to.

If you haven’t, create a formal group charged with risk management. Your chief financial officer will head this particular function within your company. The charge to the team: Illuminate all risks associated with the strategic and tactical short-, middle- and long-term execution of your business plan.

Then, create a subcommittee of three to four high-caliber line and staff executives with broad managerial and controlling experience within your risk-management group. They would be responsible for consistently and continually “sweeping” the company for potential risks to achievement of benchmark goals set within the budget year. The subcommittee would coordinate and collaborate with each respective operational group to identify, list, examine, manage, minimize or eliminate immediate risks within every activity of the company that could lead to non-achievement of those goals. Its work would start in January of each year and continue with monthly or twice-monthly meetings year-round.

In a nutshell, this means, at a high level within the company, “keeping book” on and keeping track of every problem, be that in the receivables area or inventory, or product launches, or wherever risks or dangers are perceived to be potentially present or have been identified “doing their negative thing.”

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