As our country slowly transitions into the “new normal” of post-pandemic life, business leaders are returning to what they do best – growing their businesses. We want to believe that the worst is behind us and I hope that is the case despite ongoing supply chain challenges, market volatility and inflation. It’s safe to say that business leaders are hoping this year will present an opportunity for their companies to accelerate growth and put Covid in their rearview mirrors.
Building a business requires taking risks. Executives spend a lot of time calculating which risks will make their company successful now and in the future. This type of risk-reward analysis is your wheelhouse.
But if the pandemic has taught us anything, it’s to consider the unexpected and prepare for it. That means executives who are solely focused on growing the business may not be thinking about the next unexpected disruption. Additionally, many risks require specialized expertise that is better delegated to a trusted partner to assess and manage.
This is where trusted advisors and financial experts have an opportunity to bridge the gap. Think of yourself as more than just the person advising clients on financial solutions or helping them manage their investments. As you solidify your position with your clients, consider yourself a risk management partner.
You are uniquely positioned to help in this way. When you work with business owners, you hear about the risks they face and adverse events they are trying to overcome, which were often unforeseen. You can help increase these risks for other customers and become a true partner in their business. If risks are outside your expertise, use your network to find other trusted partners with that expertise (e.g. legal, insurance, accounting or technology). Sometimes clients think of these services as expenses, but you can help them see that preparing for the unexpected will save them money in the long run.
PARTICIPATE IN RISK MANAGEMENT DISCUSSIONS
At your next meeting, take time to ask the leaders you support to consider risks that could hinder their success. Try not to get into risk mitigation or “solution finding” during this exercise. Structure the conversation according to the following categories:
With a looming recession, ask them how a stock market crash, long-term inflation, or disruptions to their company’s cash flow would affect their ability to serve their customers’ needs. Helping them consider adverse financial scenarios could lead to new solutions — or at least get contingency planning rolling.
Almost every company struggles with the “big layoff”. How do your customers deal with the risk of losing their most important asset – their employees? Do they provide the benefits, resources, and incentives to attract, retain, and develop the workforce they need to survive and thrive?
RISK OF LIABILITY
There is no time like now to think about how to prepare for weather events, accidents, or impending lawsuits. Risks that were once rare, such as fires and floods, are now commonplace in certain parts of the country.
Also, I’m often surprised when I hear about liabilities that business owners have inadvertently created or overlooked by not consulting an attorney. This can happen on a small scale, such as when accessibility for the disabled is not adequately addressed, or on a larger scale, when a company improperly uses criteria such as age, gender or ethnicity in employee decisions.
When your customers invest in insurance or financial services solutions, they trust these providers to deliver on their promises. It is important to assess whether key institutional partners have the track record and financial strength to weather difficult times. You can help your customers by reminding them of the importance of carefully reviewing partners.
The threat of cyber attacks has never been greater. This conversation may turn to an area more commonly manned by an independent insurance agent, lawyer, or IT partner. This can be another opportunity to help your clients find new risk management partners.
BUILD YOUR NETWORK
Make sure you build your network to help clients manage different types of risk. Bringing another partner to the table may feel awkward, but try not to see other risk management specialists as a threat to your relationship with your client. On the contrary, you will be the hero as you help your client fill a gap by identifying the right partner.
Ultimately, you want your clients to think of you as an extension of their risk management function. They already rely on you to help them manage financial risk, but by engaging in proactive conversations about all types of risk, you can show that you’re a partner in helping them identify and close their blind spots fix before disaster strikes.
Juan Jose Perez is President of Nationwide business solutions.