Ok, I get it; risk is not the sexiest of subjects. If there was a third certainty in life besides death and taxes, I’d say that the existence of “risk” would be a good contender.  

 

What is risk?

There are so many definitions of risk, but whichever one you look at – it’s about uncertainty, the possibility of something happening, that you don’t want to happen or haven’t planned for. Even good things happening when you are not prepared for them can bring risk. For example, a sudden surge in sales can create resourcing issues or the quality of work could drop which could create legal or commercial risks further down the line.

Well, that’s the grim reaper bit over with!

Now to the positives…the good thing is that stopping to think about the risks associated with any given decision or project can have enormous benefits.

The benefits of making risk a part of the conversation

The most obvious benefit is risk mitigation. For example, if you can identify the risks of launching a new product or service, then you can work out how to minimise or even avoid them. If a software developer identifies a data protection risk in handling client customer databases development can either avoid the risk altogether by using dummy data or if the personal data is a requirement, mitigate the risks through treatment plans that include contracts and other operational tools.

The less obvious but remarkably huge benefit of getting risk onto the table is the peace of mind it can bring, which in turn can improve business confidence and decision making. It’s this less obvious, less tangible point for me that is the interesting bit as this is where I see risk-based discussions bringing immense comfort to clients and colleagues.

In the words of Donald Rumsfeld:

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know”.

As both a lawyer and in my non-executive director/ governor capacity, I am increasingly seeing that my role is either helping to mitigate or clarify known unknowns and identify legal unknown unknowns that is bringing peace of mind and energy to those I work with. Quite often is not as clear-cut as one legal risk equals one legal solution. The circumstances sometimes require a multi-faceted legal/commercial approach and so true collaboration is key.

There is no doubt though that identifying legal risk and mitigations do remove sometimes intangible barriers to the decision-making process. I have seen it. The collaborative sessions we run with clients often lead to the client pressing the green button on a project.  We rarely eliminate all risks, but we do help to mitigate them. In some instances, we even identify more risk! However, the difference is that the client is now “in the know” and has a much clearer picture and a plan. Ultimately, there is a stronger sense of control, and the invisible cloud has been lifted.

Acknowledging that you don’t know what you don’t know and finding a path to identify the unknowns is hugely beneficial. Risk management policies and risk registers can provide a good methodology to start considering these issues. Who knows, they may possibly flush out some previously unknown’s unknowns into the conscious mind.

Even more likely, usually, at best there’s something floating around in the subconscious somewhere, holding you back, but you can’t put a finger on why. The phrases I hear most are, “I’m not sure if I’m missing something”, or “I don’t know what I don’t know”.

When you read The Four Phases of Leadership Growth by John C Maxwell (American Leadership Guru), the parallels with understanding risk are clear.

If you want to know more or have any questions, then contact Tracey today: tracey@law-point.co.uk or call 01202 729444.