Risk Appetite – Taking the Shot

“You miss 100% of the shots you don’t take” – Wayne Gretzky

At Tykee Advisory, we believe risk management isn’t about avoiding risk. Like Gretzky says, the real danger is not taking the shot at all. Risk appetite is what helps you decide which shots are worth taking and how many you are prepared to miss along the way.

Why does risk appetite matter?

• Risk appetite is the “are we willing to?” in every strategic conversation. From taking on debt to expanding operations. Even if you don’t call it risk appetite, you’re thinking about it every time you make a business decision
• A clear appetite empowers your team to make aligned decisions, without constant input from leadership.
• Without it, you default to personal bias, risk averse staff stall progress, while risk takers can overstep. Defining appetite brings balance.

In practice, effective risk appetite:

•  Is developed in line with your strategy, not insolation
• Is clear, communicated and measurable
• Uses KRIs to track if you’re within bounds
• Is reviewed, reported and acted on when breached

It doesn’t have to be pages of documentation. For smaller organisations, it can be as simple as a leader consistently talking about it and monitoring it. For larger organisations, it needs structure, reporting and governance.

The principle is the same, well communicated risk appetite builds confidence, clarity and results in better decisions. If you’re ready to define your risk appetite, align it with your strategy and give your team the clarity to act with confidence, lets have a conversation.