De-risking 2018: Reducing the Cost of Hidden Information
Today’s risk climate is characterized by an increasingly complex business architecture and environment, lacking conduct and cultural frameworks, rapidly changing technology, regulations and measurements. Not surprisingly, risk losses continue to reach staggering levels and the cost of hidden information in organizations is astronomical.
In response, many organizations are foregoing their conventional risk workshops for a more agile approach to Operational Risk Management (ORM). Such approaches make risk more accessible to the edges of the organization; making everyone a de facto risk officer. Once the exclusive domain of the CRO, every Business Unit manager, Operations Manager, Program or Project Manager, Process Manager, and Team Lead now has a vital role to play in risk mitigation.
Three practical and simple ways to de-risk your 2018:
1. Engage more of the right stakeholders. Risk control responsibility needs to live at the edge of the organization and this “first line of defense” approach for Risk Control Self Assessments (RCSA) is critical in driving agility and risk-decision quality. Uncover and vet hidden information in a timely, continuous and efficient engagement of the front lines and subject matter experts who know the lay of the land. Diversity and Red Teaming matter a lot when it comes to de-risking operations and you can’t let geography or time zones get in the way.
2. Reframe the Risk conversation. Make the conversation more meaningful and valuable to Operational Leaders by focusing on achieving success. Ask, “What specific obstacles/challenges could get in the way of wildly successful outcomes for our initiative/project/program/process in 2018? Some of the obstacles will be constraints, assumptions, or risks while others will be dependencies or critical issues. To be successful, each needs to be resolved or mitigated.
3. Start simple, scale fast. Start with one new agile process and bake it into your initiative/program/project lifecycle. Below are three that can be implemented quickly, require little stakeholder training, have a huge ROI, and are repeatable and scalable across the organization:
- Premortem - before the initiative: Give an initiative the best chance of succeeding with a creative look into the future from the present.
- CARDIO™ - during: Change is the only thing that is certain once the initiative is underway.
- Postmortem - after: A retrospective where stakeholders build a better future for the next initiative based on learnings from the past.
Fortunately, today’s increasingly complex and fast-paced climate is also characterized by knowledge and tools that effectively and efficiently deal with current realities.
Because risk management is all about making quality decisions at the edge of your organization.
- UK-based Post*Shift has outlined new issues and opportunities around risk management in the digital age.
- What’s in your supply chain? - Keeping your partnerships healthy too.
- Total returns to shareholders as a result of operational risk issues can decline by as much as 12 times the initial actual reported loss.
- 7 Ways Diversity Can Improve Your Decision-Making and Risk Assessments.
- Best practice: Why You Should Assess Before You Assume. (Lessons learned from the likes of Coca-Cola and Target.)