Incorporate risk into every business plan

In order for a business to succeed, everyone should be working towards the same goals. And those goals should be firmly established in the formulation of every business plan. No action or decision taken in the running of a business is without an element of risk, and a good CEO will approach the process of planning for risks using strong leadership to get everyone on the same page.

There are different schools of thought on what is the best leadership style. One environment where quality leadership is absolutely essential is in the military. One might think that a leadership system which is entirely top-down and one dimensional is the only way to go in a military environment, but that it not always the case. And for a CEO in an SME, it can be prudent to follow the same ethos to be successful.

Shared purpose

At the fundamental level, it is important to understand that the primary goal of leadership in any environment is to build a consensus among the people being lead. Your team, at every level, is full of individuals who need to feel valued in the process of making and enacting a business plan, and you are the person with the power and responsibility to achieve this.

The most important thing you can do to cultivate a high level of commitment among all your team members is to establish and maintain strong relationships throughout every level of the company. Certain individuals will have the authority to make decisions where risk is involved, and you need to ensure both you and they feel confident in their ability to do this. If you have strong relationships throughout your team, you will be able to plan for the risks.

Fostering commitment

Commitment in a team can be broken down into five key elements: loyalty, trust, faith, effort and respect. All of these must be reciprocal, so even if you succeed in inspiring those things in your subordinates, it’s important that you show the same attitudes towards your team members. A business is only as strong as the people within it, and a business plan will live and die by the commitment of the people who enact it. When planning for risks, you and your team will have to study the market extensively, and you will be able to gauge things more accurately with a fully committed team.

To achieve this, you must practice effective listening and recognise the skillsets of your subordinates through reverse mentoring. That way, you will be able to fully access the abilities of those you are leading, and fully leverage their strengths to get the very best out of their work.

Strong leadership is important for the CEO in every aspect of a company’s work. Your role in producing a business plan is to have established a team full of confident, competent individuals who will work together to inject their own strengths into studying the market and developing the final plan. Risk is inevitable, and if you and your team are all aware of each other’s skills and strengths, with a comprehensive analysis of the market undertaken, you can be prepared for when risks turn sour as well as when they yield positive results.

Image credit: writing business plans – Credit to by Informedmag licensed under Creative commons 4