Risk matters most in high-stakes industries such as aviation, finance, healthcare, energy, and many more. Any mistake that occurs in these industries can have a massive impact on finances, reputation, and human consequences, or even all three.
This is why effective risk management is so important, as it protects you from all the issues that could potentially arise.
For example, over 70% of construction accidents are linked to unsafe actions or behaviours, which points to a failure in implementing and enforcing comprehensive safety management systems.
Lessons From The Aviation Industry
As many of us know, the modern airline will follow strict health and safety protocols to ensure the safety of its passengers and cabin crew.
Furthermore, they will ensure that the cabin crew have a high level of training regularly. This will also be continuously monitored to ensure the safety of the aircraft.
In terms of the plane itself, there will be numerous safety checks of the plane. It will have to face regular audits along with any incident reviews that could have potentially occurred on the flight.
Ensuring the safety of the cabin crew and passengers will not only reduce any errors, but it will also help save human lives and reduce any financial loss.
This is something that should be included for general business. A system in place that helps mitigate risks and prevent them from happening, no matter what industry you are in.
Lessons From The Finance Industry
Even in the finance industry, there are lessons to be learned from these. Regulatory compliance, risk management, and internal controls are all essential in this particular industry.
If these are not followed, then there is a high risk of reputational damage, which can then lead to a loss of client confidence along with major fines.
A good example of a financial firm that failed to mitigate risk is the Lehman Brothers and their collapse during the financial crisis in 2008. They struggled to manage the cash flow, and it soon cost them the business.
When it comes to general business, trust can go a long way. This is what can help you attract new clients as well as have your current clients continue to come back to you.
This makes your business far more sustainable because you don’t need to naturally seek new clients, as your reputation alone will be able to attract new clients.
Lessons From The Healthcare Industry
Another industry that specifically needs to mitigate its risks is the healthcare industry. Although reputation can be a large factor in this particular industry, it wouldn’t affect them in terms of how busy they are because people will always need healthcare.
That being said, it can lead to severe fines and job losses.
Risk management in this particular industry is vital. This includes staff training, health and safety protocols, audits, and even patient safety measures. Incident reviews are also very common in this particular case, as they need to find who is at fault for them.
If there is a patient who has been affected by something that has happened due to the lack of care, they will likely seek help from a solicitors such as Been Let Down.
This is why a hospital or doctor must hold themselves accountable for any issues that may have occurred.
How Other Industries Can Learn From High-Stakes Industries
No matter what industry you are in, there will always need to be some level of risk management because there is always a risk. Whether that is the health and safety of a client or employee, or even reputational risks.
A certain level of training has to be completed by everyone who works for that specific business. Not to mention that people must be able to hold themselves accountable for any mistakes, whether that is the whole business or an individual.
Something else that is essential is transparency, especially when it comes to reporting. Plus, there must be people who monitor others’ performance and ensure they are doing everything right to help reduce risks.
Not to mention that certain industries should be investing in good technology that helps improve the overall process. Remember, risk management shouldn’t just apply to those who work in a high-stakes industry; it should also be for those who are much smaller as well.
To Conclude
The main reason why risk management is so important is that it protects you from any fines that can occur. Additionally, it can also help to reduce the chances of any reputational damage.
Reputation is massively important to smaller companies, so this must be taken care of. Furthermore, it can also help a business to operate more efficiently and responsibly.
At the end of the day, businesses should embrace accountability and be proactive with their risk management. This helps to secure long-term success because it helps build a good reputation that will secure more clients, customers, or employees.
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