Risk

How to master business risk and grow your business

Regardless of your work, industry, or personality, everything you do for reward carries risk. The key to surviving through it is to understand it and manage it. Thankfully, risk operates the same way no matter what you’re up to

Step 3: Risk policy

The idea of a risk policy is to help guide your own actions and the actions of others who do work on your behalf. Ray Dalio, founder of hedge fund Bridgewater, talked at length about getting the right kinds of actions through the right ‘policy’ foundations in his book Principles.

risk is risky, but only if you don't have a plan

When creating a business risk policy, note it has to be customized to what you do. For example, Dr. Rosen’s company d1g1t is in the financial analytics and wealth management space, so risk policy would be things like the kinds of accounts and investments work for clients. In other industries, such as sports, for example, risk policy might be more focused on injury prevention and optimizing technique.

people take a lot of business risk without even knowing it

Think specifically of your goals and tolerance/capacity when creating mandates. In general, think of policies or mandates that help you:

  • Capitalize on growth opportunities
  • Keep you on track toward your goal
  • Minimize loss
  • Help you automate decision making (e.g. decision-tree frameworks or escalation pathways)

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