Many a leader have expressed similar sentiment as asserted by Sun Tzu, the Chinese military general, writer and philosopher, in his book, “The Art of War”, that “Attack is the secret of defence; defence is the planning of attack”. In many ways, this saying is correct because it forces one to avoid becoming naive and ignorant about imminent threats. In other circumstances, however, the strategy could be construed as showing unnecessary aggression when the situation could be calling for calm, sound mind, patience and focus to be exercised.

Wisdom is discerning on the appropriate time to adopt and apply the relevant approach. By Nimroth Gwetsa, 29 September 2023.

Wisdom is driving with eyes focused on the road ahead while maintaining all-round situational awareness, because driving with eyes firmly set on the rear-view mirror for a prolonged period could result in a crash. Entrepreneurs and anyone interested in succeeding cannot afford to waste time searching for enemies and threats instead of casting their eyes on what they ought to do to attain success.

Many a time, people are chasing shadows, worrying about those planning their downfall or posing a threat to them than on advancing their plans. Spending bulk of the time searching for threats takes important time away from advancing your plans. But urging a focus on the plans should not come at the expense of becoming ignorant of the threats.

Situational awareness without being bogged down by the threats and incorporating your response to them in your advancement plans is the best form of defence through positive attack actions. The focus that an entrepreneur should maintain is sustaining the growth of their business while acknowledging and mitigating the risks, as opposed to being inwardly focused on the threats while taking eyes away from growth activities. A balanced approach is required.

No matter the slogans by many on how they support small businesses, transformation and diversity, many such utterances are nothing but politically correct slogans. In reality, people look after themselves before concerning themselves about anyone else. Entrepreneurs are responsible for looking after their businesses and not making it someone else’s. Truth is, if someone’s performance and/ or reward is based on them pursuing objectives that may conflict with the interests of the entrepreneur’s business, that person would not abandon their plans because they do not wish to cause problems for an entrepreneur. To the entrepreneur, such would seem a betrayal.

Rather than fretting over attacks from others, entrepreneurs should concern themselves about advancing their businesses. They should use their situational awareness to defend the business proactively to offset or nullify such threats while enabling it to advance. Spending enormous time trying to close gaps and stop attacks would result in the entrepreneur spending valuable resources and time plugging holes instead of increasing their coffers.

Businesses face many risks, including physical, financial, reputational, and technological risks. These risks can cause significant damage if not addressed properly. Undoubtedly, it is important to understand the risks facing your business and take steps to mitigate them. By doing so, you will help ensure the continued success of your business.

Nevertheless, while casting eyes on expanding the business and ensuring its sustainability, the obvious threats an entrepreneur should maintain awareness of and whose response to those threats should be built in, in their advancement plans, should include:

1. Looking after customers, employees and communities impacted by the activities of the business. This will provide some mitigation of the risk of negative sentiment against you in influencing customers, employees and communities against the business. Mitigate the risk of others poaching your employees and customers.
2. Sudden, premature and unforeseen termination of active business deals/ contracts. Mitigate ill-timed disruptions to earnings.
3. Changing operating conditions of the business environment such as economic downturn, disruptions from natural events and physical damage to the business, cybersecurity threats or loss of equipment and tools, misconduct by employee, fraud or intellectual property loss.

Intellectual property loss may sound farfetched as in having your ideas stolen, but it is closer to home than you may think. The easier one often neglected is having your work appropriated by others and presented to decision makers as their works while setting you aside.

You cannot always be imposing yourself as if you are competing with your clients, or their employees. But you should be confident enough to know your work can stand-out on its own and that eventually, the truth shall out as to the original owners of the intellectual property.

Now, the awareness of such threats enables you to take steps to assess the risks the business faces and to mitigate them. Even if the risks are not immediately mitigated, the assessment of the risk would enable you to take steps in future as opportunities arise, having prioritised their resolution based on your perceived likelihood and impact of their occurrence.

Implementation of the resolution of those risks should be accompanied by monitoring and evaluation of the effectiveness of those measures taken to resolve the risks. A solution cannot be a solution unless it is an answer to the problem concerned. Hence, the evaluation of the effectiveness of controls and residual risks should confirm whether the risk as a problem, has been answered.

Not all threats or risks can or should be mitigated. The resolution depends on the appetite for risk the business can accept in pursuit of the objectives of the business. It also depends on the risk the business can tolerate or accept without impacting on its ability to meet its objectives. In other words, through determination of the risk appetite, you would be defining the level you are willing to accept the risk to the business, and by determining the business risk tolerance, you would understand the level of risk the business can handle when it occurs.

Businesses are different. So are their risk appetite and risk tolerance levels because those depend on the capacity each business has. Capacity enables the business to withstand the consequences of a risk event. And as capacity changes over time, so would the risk appetite and tolerance.

In determining the capacity of business to tolerate the risk, the likelihood of its occurrence and the potential consequences of that event should also be determined. The higher the appetite and the risk tolerance, the higher the risk you can consider and take. Likewise, the lower the risk appetite and tolerance, the lower the risk you should take.

Entrepreneurs should then avoid trappings of a “good life” as shown on social media, in splurging out money on frivolities or depreciating “assets” or failing to invest more in the business technological or advanced skills.

By understanding risk appetite and risk tolerance, you can make better decisions about how to manage risks for your business. Nevertheless, as mentioned earlier in an analogy about driving and the need to look ahead than behind through a rear-view mirror, effective risk management is not only about avoiding risk (rearview looking) – it is also about embracing opportunities and pursuing them (forward-looking).

That way, you would be increasing the capacity of your business and significantly improving its risk appetite and tolerance. You do not wish to take on too much risk, but you also don’t want to shy away from risk altogether. You want to find the “just right” amount of risk.

Defend and protect your business through forward movement!