Post by Gregg Caplitz on Aug 17, 2021 20:10:40 GMT
C. Post: On the Discussion Board, please respond to these questions (and we will discuss in class):
1. Is Risk ever acceptable? If so, how much risk is acceptable?
Risk is by necessity acceptable. Absent risk it is impossible to achieve growth. Risk is inherent in every business transaction. It is the role of business development to analyze the risk incumbent with each new transaction and to determine whether it fits the overall risk profile of the agency and FedCap as a whole.
2. How would you assess your program/company’s overall risk appetite?
CWS was fairly risk averse as an entity when I joined. One of my task as I first reviewed the culinary operations and later transitioned to business development was to review the existing business profile to determine the risk involved with each specific item. The task of growing business also requires an understanding of the risk for each incremental piece of business. CWS is much more risk tolerant while still continuing to be cautious.
3. Is operating without risk a smart business decision?
No, as discussed in my first response without risk you cannot grow and as our CEO Christian is fond of saying “if you aren’t growing you are shrinking”.
4. Given its growth, what are some risks that The Fedcap Group faces? (include reputational, financial, structural etc.)
There are several inherent risks in FedCap operation. The first is financial risk. With operations in 18 states and 3 counties with over 2500 employees FedCap has substantial financial obligations which must be meet daily. This requires managing and controlling cash flow, a/r, a/p and the other normal parts of financial budgeting. They also now have currency risk since a significant part of their revenue and earnings are not denominated in dollars.
They also have structural risk. The FedCap operation involves numerous independent 501 c 3 organizations in the US and their equivalent entities in Canada and the UK. Each has independent boards along with reporting requirements, certifications and other entity specific requirements. Failure to meet these requirements could generate financial as well as reputational risk. FedCap’s unique approach to the non-profit arena where the primary method of growth is via combination is, to my knowledge, unique in the nonprofit arena.
I briefly dealt with reputational risk but it is, to a nonprofit, perhaps the most significant and overlooked risk. CWS, my direct employer, is 144 years old and has maintained a sterling reputation. While not well know part of my task is to increase its exposure and awareness among individuals, donors and organizational. This must be done without damaging the stellar reputation earned over that time. With social media and so many new advocacy groups and single mistake can create huge damage
5. How do we engage staff in understanding and actively managing reputational risk?
It is important that staff understand that every action carries the potential for reputational risk. This is not to inhibit growth but to make people once again aware that actions have consequences. We look at each new business opportunity to determine both its financial opportunities risk and reputational opportunities and risk. They simply go hand in hand. The best way to increase awareness is the same as we do with anything that senior management want to promote whether it safe Covid practices, better efficiency or growth opportunities.
6. Discuss a specific example of reputational risk that is directly relevant to your program/company?
During Covid we decided to create our “Double Impact Meals Program” this involved the preparation and delivery of 70,000 hot meals to First Responders and other individuals impacted by the disease. If even 1 meal was bad and someone got sick the potential reputational impact could have been tremendous. This required us to put in careful controls to ensure safety. We have received enormous positive publicity because of this but the success is because we understood and managed the risk.
1. Is Risk ever acceptable? If so, how much risk is acceptable?
Risk is by necessity acceptable. Absent risk it is impossible to achieve growth. Risk is inherent in every business transaction. It is the role of business development to analyze the risk incumbent with each new transaction and to determine whether it fits the overall risk profile of the agency and FedCap as a whole.
2. How would you assess your program/company’s overall risk appetite?
CWS was fairly risk averse as an entity when I joined. One of my task as I first reviewed the culinary operations and later transitioned to business development was to review the existing business profile to determine the risk involved with each specific item. The task of growing business also requires an understanding of the risk for each incremental piece of business. CWS is much more risk tolerant while still continuing to be cautious.
3. Is operating without risk a smart business decision?
No, as discussed in my first response without risk you cannot grow and as our CEO Christian is fond of saying “if you aren’t growing you are shrinking”.
4. Given its growth, what are some risks that The Fedcap Group faces? (include reputational, financial, structural etc.)
There are several inherent risks in FedCap operation. The first is financial risk. With operations in 18 states and 3 counties with over 2500 employees FedCap has substantial financial obligations which must be meet daily. This requires managing and controlling cash flow, a/r, a/p and the other normal parts of financial budgeting. They also now have currency risk since a significant part of their revenue and earnings are not denominated in dollars.
They also have structural risk. The FedCap operation involves numerous independent 501 c 3 organizations in the US and their equivalent entities in Canada and the UK. Each has independent boards along with reporting requirements, certifications and other entity specific requirements. Failure to meet these requirements could generate financial as well as reputational risk. FedCap’s unique approach to the non-profit arena where the primary method of growth is via combination is, to my knowledge, unique in the nonprofit arena.
I briefly dealt with reputational risk but it is, to a nonprofit, perhaps the most significant and overlooked risk. CWS, my direct employer, is 144 years old and has maintained a sterling reputation. While not well know part of my task is to increase its exposure and awareness among individuals, donors and organizational. This must be done without damaging the stellar reputation earned over that time. With social media and so many new advocacy groups and single mistake can create huge damage
5. How do we engage staff in understanding and actively managing reputational risk?
It is important that staff understand that every action carries the potential for reputational risk. This is not to inhibit growth but to make people once again aware that actions have consequences. We look at each new business opportunity to determine both its financial opportunities risk and reputational opportunities and risk. They simply go hand in hand. The best way to increase awareness is the same as we do with anything that senior management want to promote whether it safe Covid practices, better efficiency or growth opportunities.
6. Discuss a specific example of reputational risk that is directly relevant to your program/company?
During Covid we decided to create our “Double Impact Meals Program” this involved the preparation and delivery of 70,000 hot meals to First Responders and other individuals impacted by the disease. If even 1 meal was bad and someone got sick the potential reputational impact could have been tremendous. This required us to put in careful controls to ensure safety. We have received enormous positive publicity because of this but the success is because we understood and managed the risk.