Predictions are hard, especially about the future
What are your business objectives? And how certain are you that you’re going to achieve them? If you’re at all uncertain, the effects of this uncertainty may be termed ‘risks’. That’s why predictions about the future are hard. Uncertainty is risky.
Risk is good
Risk tends to be thought of as negative. It’s like that in most cultures. It’s due to the framing effects of society and how we’ve been educated from childhood. But risk isn’t just about the negative.
Think about it this way, why do cars have brakes? Yes, it’s so that the driver can slow down, avoid hazards to stop. But brakes on a car are the ultimate risk management device. They help control the car, are inherent to driving and in actual fact help the driver to go faster — in effect, take more risk.
Now think about it in the context of business. How did successful companies get to where they are today without taking risks? It’s arguable that there would be no companies, or no successful or long-standing ones at any rate, without risk-taking.
Furthermore, it is companies with robust risk management structures and confidence in them which invariably have the flexibility to be more enterprising and entrepreneurial i.e. take more controlled and calculated risks.
Risk is inherent to business
This makes managing risk a natural and integral part of business too, alongside other management disciplines such as project management and change management.
So, whether your business objectives are to build scale, specialise or diversify, choosing the right partner is critical to managing risk. If you choose the wrong partner, your risk exposure is higher from the start. It may also be more difficult to recover from a wrong choice over the lifetime of the contract. And that’s irrespective of whatever ‘fail faster’ policies either party puts in place.
Choosing the right partners is not just about conducting due diligence on the counterpart’s financials, legals and competence to conduct the contracted services, although this is important. Nor is it just about agreeing a scope of work, a robust contract and a project plan. Choosing the right partner is also about strategic fit and chemistry.
Are your strategic goals aligned? Are there synergies between your leadership teams, governance and cultures? Tellingly, it is these people and partnership-related factors, rather than the process and procurement-related ones, that contribute the most. Both to the success of the relationship and the ability to manage uncertainty or risk together.
At RS2, we place particular emphasis on understanding customer needs and tailoring each partnership so it is uniquely individual. We have extensive partnership experience across our broad customer base. This ranges from multi-nationals and international processors to regional acquirers and issuers and local banks in more than 35 countries. We also focus on building long-term relationships and are proud that we have a customer retention rate of more than 95 percent.