everything changes around us , the risk posed by technology , particularly Artificial Intelligence ( AI ), is becoming the number one risk factor . It ’ s crucial , therefore , that senior management spend time understanding how technology in their industry is changing and how it will affect the dynamics of that industry in the future .

Managers in most companies need to know the level of risks they should be concerned with . Senior managers ignore the critical strategic risk and focus on operational and tactical risks . I don ’ t mean operational risks are unimportant , but senior managers should spend their time worrying about risks that may shut down a company . And not only worrying but also doing something about it . Mitigating risks is always discussed , but more action is required from senior management to safeguard companies from various imminent risks .

When the audits flag possible risks , management should spend time categorizing the risks into strategic , operational , and tactical classes . After that , risks should be categorized by the probability of occurrence and the scope of the loss . Senior managers should focus on threats that are likely to happen and those that would bring a significant loss . Each manager would consequently focus

on risks corresponding to their level of responsibility .

Continuous scans of internal business structures and external environment for potential risks is a fundamental role of senior management and the board of directors . On the other side of risks are opportunities . To counter threats , senior management should continually seek feasible opportunities for the company . A certain risk may be closing a specific door but , in disguise , opening another one . A company faced the risk of losing a key revenue customer and , therefore , shutting down negotiated a partnership with the customer , nullifying that risk . Another company developed sales in a new sector to mitigate revenue loss from a critical customer .

The best time to mend a fence is before the ox has broken out . A wise farmer goes around the farm regularly , looking for weak links in the fence and repairing it before a costly event happens . Management wisdom is the ability to conduct risk audits and reviews and implement recommended actions to prevent or mitigate risks .

Scanning the environment for opportunities available to minimize the risks is management elegance . Sitting and basking in current and past glory is folly ; somebody can liken it to a monkey enjoying the morning sun on a warm stone in the middle of a river , oblivious of what would happen in case of a storm upstream .

Herman Githinji is a Management Consultant and a Director at Rhombus Ready Mix Concrete Company . You can commune with him on this and related issues via email on : Hermangithinji @ gmail . com .

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