The document outlines seven types of risks that businesses should mitigate, based on Peter Drucker's framework: structural, execution, competitive, investment, integration, misalignment, and governance risks. It emphasizes the importance of effective risk management through identification, assessment, and preventive actions to minimize exposure. Continuous monitoring and reviewing are essential for successful risk management, enhancing business quality and returns.

1. 7 Risks Every Business
Should Mitigate
“Risk is of the essence, and
risk making and risk taking
cons4tute the basic
func4on of enterprise.”
– Peter Drucker
by Faisal Hoque
founder of:

2. Peter Drucker
Outlined four kinds of risk:
• The risk one must accept, the risk that is
built into the nature of the business
• The risk one can afford to take
• The risk one cannot afford to take
• The risk one cannot afford not to take

3. SEVEN
sources of risk

4. Structural risk
“The fundamental
legal and
organiza4onal
makeup of the
business.”

5. “The robustness of
the business model
and how well it is
being executed.”
Execution risk

6. “The ability to
sustain compe44ve
ac4on and
retalia4on.”
Competitive risk

7. “The ability to manage
spending in a business
environment where
capital is scarce.”
Investment Risk

8. “The risks of
inadequate integra4on
between strategy,
investments, people
and processes.”
Integration risk

9. “Inadequate
alignment between
organiza4on and
business priori4es.”
Misalignmen risk

10. “The risks of inadequate
par4cipa4on and
involvement of
management team & BOD
on key discoveries and
decisions.”
Governance risk

11. “I have learned that nothing is certain
except for the need to have strong risk
management, a lot of cash, the willingness
to invest even when the future is unclear,
and great people.”
-­‐ Jeffrey R. Immelt, GE
How to manage risk

12. Three key principles for
managing RISKs
• Iden7fying the nature of risks
inherent in the situa4on.
• Assessing the likelihood of the risks
manifes4ng themselves.
• Taking preven7ve and correc7ve
ac7on to reduce the enterprise’s
level of exposure to the risk.

13. “Risk management is not a one-­‐off
exercise. Con4nuous monitoring and
reviewing are crucial for the success of
your risk management approach.
Good risk management can vastly
improve the quality and returns of any
business.”

14. About Me
Founder of Shadoka and other
companies. Shadoka enables
entrepreneurship, growth, and social
impact.
Formerly of GE and other global brands.
Author of several books, including
Everything Connects – How to
Transform and Lead in the Age of
Crea:vity, Innova:on and Sustainability
(McGraw Hill, Spring 2014) and Survive
to Thrive – 27 Prac:ces of Resilient
Entrepreneurs, Innovators, And Leaders
(Mo7va7onal Press, 2015).
Follow me @faisal_hoque.
Faisalhoque.com | shadoka.com