Page 1: Enterprise and risk
Enterprise refers to all the organisational skills that go into creating a product or service. It also includes a willingness and ability to take risks in order to gain rewards and to think up new products or services. Land Securities manages its risks by making sure it has a balanced portfolio. The portfolio will contain some developments that carry a substantial element of risk but which, if successful, will bring high returns. It will also contain lower risk activities, which ensure a steady income stream. Land Securities has a well-established risk management strategy that follows the six steps shown in the diagram.
Risk Management at Land Securities
- Identify the business goals and objectives (the reasons why risks are taken).
- Identify the risks.
- Measure the level of risk.
- Develop action plans to manage the risks.
- Assess the risks again after they have been managed.
- Report at each stage.
This company combines this strategy with innovation - thinking up new products and services to meet clients' needs. Examples of these include:
- Property outsourcing - Land Securities Trillium is the market leader here.
- Additional client services - e.g. building maintenance, cleaning, reception and security.
- Landflex - this enables clients to change the size of their accommodation over time and to have flexible leases on property.
In addition to thinking up new lines of business, Land Securities must monitor its ongoing activities. It constantly checks its portfolio of properties and projects to ensure that they are producing the best possible returns. This involves carefully managing the other three factors of production.