Raising the opportunities for business success in spite of uncertain conditions
Written by: Amir Bramly, founder and CEO of the Israel Center for Business Analysis. Proponent of the Business Risk–Opportunity methodology and index, and expert in analysis and minimization of risks to businesses and corporations.
Business risks versus opportunities for businesses under uncertain conditions
Sometimes, uncertain conditions create the greatest business opportunities. In business activity, we are daily exposed to many risks: financial, operational, organizational, marketing environment and, in the case of Israel, diplomatic and political. Uncertainty is one of the popular arguments in favor of abstaining from business activity in an unfamiliar environment. Uncertainty primarily causes us to reject a possibility or an opportunity before we even look into the details.
When I feel the fear of uncertainty, I usually ask, "How uncertain is it?"
When I start to feel the fear of uncertainty, I usually ask: "How do you measure uncertainty?"
Even though this sounds like a philosophical question, it is really an item of data that can be calculated and quantified to a nominal value. In order to estimate the risks and opportunities in an uncertain business atmosphere, we must evaluate and weigh up all the risk factors involved in this activity, and consider the result compared with an alternative The BRO (Business Risk–Opportunity) index is one of the advanced tools for the evaluation of the entire package of risks and opportunities inherent in business activity in changing markets.
In business activity with and in Arab states, we often overemphasize the importance and weight of political and diplomatic risks, and we also generally underemphasize the importance of the opportunities and chances that would enable cooperation. It is important to remember that risk is quantifiable; it is not just a gut feeling. Each risk has a risk factor and in most cases when the risk factor is familiar or known, it is possible to reduce the risk to a minimum.
If the mathematics are so clear, why do we still shy away from opportunity?
It appears that business with the various Arab states, and the Palestinians Authority in particular, suffers from a specific risk that is more important than any other in the decision-making process, the emotional risk. What is the emotional risk? This risk is one of the dangers that inhibit business activity on the basis of feelings, opinions, personal or social influence, and their existence prevents us from performing a traditional risk evaluation. In other words, the emotional risk causes us to avoid performing risk analysis, and especially opportunity analysis, during business negotiations with Middle Eastern countries.
Make no mistake, business activities between Israeli parties and various Arab states and specifically the Palestinian Authority, entail substantial risks that must be considered seriously. However, prior examination and measurement of the risks versus the opportunities presents safer business opportunities, and with a higher chance for success even than with joint ventures between Israelis and Palestinians.
This is not a political or diplomatic agenda, rather a methodology that enables us to bridge the fear of uncertainty, to give the risk and the opportunity a price tag, and to substantially raise the chances of business success, even when exposed to political and diplomatic risks.
In summary, I will state that the political atmosphere causes us to give more importance to political risks in economic cooperation in the Middle East. Moreover, it causes us to refrain from objectively reviewing the opportunities, and thus prevents us from realizing the potential and chances of success of a joint business venture. Most of the possible risks can be minimized, and in many cases a safer business environment can be created than that with friendly but far-distant states.
The BRO Index – enabling the opportunity to overcome the business risk |
