Risk management has strategic dots that need to be connected.
Every risk has opportunities in it; every opportunity implies potential risks. View risk management as an integral part of strategy management practices to accelerate performance and improve business agility and maturity.
The management risk intelligence: To handle unprecedented uncertainty and complex issues effectively, the management needs to assess their risk appetite and tolerance, visualize and identify uncertainty, convert uncertainty to risk through the application of quantification methods in order to be able to manage uncertainty as risk, and move up management maturity from risk mitigation to risk management to risk intelligence. Technically, to mitigate risks and make continuous delivery, understand the technical nuances as well as all the business artifacts that make up the strategy roadmap, integrate risk into resource prioritization and planning processes.
Risk management has strategic dots that need to be connected. Risk should be seen in a much more positive light as it creates many opportunities for those that wish to see beyond a defensive response. Technically, the risk management mechanism needs to be well embedded in processes or corporate culture, put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings, and learn from previous failures. Managers are paid to achieve objectives using available resources and overcome the day-to-day uncertainties.
Employees' level of understanding of risk resilience: People tend to be "risk averse"; fear of disruption, the existence of chaos, fear is one of the causes of change inertia in business settings. Change or innovation implies risks. Usually return and risk are proportional. The management needs to ponder: Do enough organizations really encourage their employees to step up and propose bold transformational change initiatives and then ask management to follow through? Do people need to be forced to comply with risk management activity or do they naturally consider it as part of their daily job? Do people too preoccupied with those nitty-gritty risks whilst losing sight of the big picture risk? A digital mind with risk intelligence can naturally and skillfully apply risk-based thinking for almost every discipline of management,
Change, especially the large scale business transformation; innovation, especially breakthrough innovation is inherently risky because it is new and different. Very few employees at the lower level of the hierarchy are aware of the true cost /benefit of risk management to the company. It takes both analysis and guts to make effective decisions; the right dose of risk appetite and attitude help people take aggressive initiative with the right level of mental, psychological and conditional chemistry. It is imperative to foster a creative environment in which people are encouraged to take risks, experiment with new ways to do things and challenge the status quo. People become more risk resilient by failing faster and failing forward. The organization can accelerate change in a structural way.
The qualitative information on risk assessment in culture: Culture is collective mindset, attitude, and behavior. the possibility of risk being cascaded to all entities in a given industry, function, or partnership. It has a broader perspective, involving many known unknowns and unknown unknowns because it is about the future. There must be awareness from all people across the organization about corporate culture, the management needs to collect qualitative information on risk assessment in cultural assets. A meaningful risk information includes appropriate aggregation processes for the executive as well as an appropriately calibrated risk scheme that is gaming-proof.
In terms of risk avoidance and the risk-tolerance culture, there is a gray area in between. The key is balance, give enough autonomy to the business management to make its own decisions on taking or avoiding risks across the business hierarchy with consistency, and put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings. Forward-looking organizations are at the journey for digital transformation, even having a risk-awareness culture is not strong enough to adapt to the changes, at a higher mature level, risk-intelligent culture needs to be cultivated to manage both opportunities and risks effectively.
There is a great deal of uncertainty involved in the risk management process. A well-developed risk-management framework helps the business take a structural approach with all important business elements such as principles, processes, practices, facilitate a structural cycle to benchmark business operations, as well as improve the overall risk management maturity.
The management risk intelligence: To handle unprecedented uncertainty and complex issues effectively, the management needs to assess their risk appetite and tolerance, visualize and identify uncertainty, convert uncertainty to risk through the application of quantification methods in order to be able to manage uncertainty as risk, and move up management maturity from risk mitigation to risk management to risk intelligence. Technically, to mitigate risks and make continuous delivery, understand the technical nuances as well as all the business artifacts that make up the strategy roadmap, integrate risk into resource prioritization and planning processes.
Risk management has strategic dots that need to be connected. Risk should be seen in a much more positive light as it creates many opportunities for those that wish to see beyond a defensive response. Technically, the risk management mechanism needs to be well embedded in processes or corporate culture, put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings, and learn from previous failures. Managers are paid to achieve objectives using available resources and overcome the day-to-day uncertainties.
Employees' level of understanding of risk resilience: People tend to be "risk averse"; fear of disruption, the existence of chaos, fear is one of the causes of change inertia in business settings. Change or innovation implies risks. Usually return and risk are proportional. The management needs to ponder: Do enough organizations really encourage their employees to step up and propose bold transformational change initiatives and then ask management to follow through? Do people need to be forced to comply with risk management activity or do they naturally consider it as part of their daily job? Do people too preoccupied with those nitty-gritty risks whilst losing sight of the big picture risk? A digital mind with risk intelligence can naturally and skillfully apply risk-based thinking for almost every discipline of management,
Change, especially the large scale business transformation; innovation, especially breakthrough innovation is inherently risky because it is new and different. Very few employees at the lower level of the hierarchy are aware of the true cost /benefit of risk management to the company. It takes both analysis and guts to make effective decisions; the right dose of risk appetite and attitude help people take aggressive initiative with the right level of mental, psychological and conditional chemistry. It is imperative to foster a creative environment in which people are encouraged to take risks, experiment with new ways to do things and challenge the status quo. People become more risk resilient by failing faster and failing forward. The organization can accelerate change in a structural way.
In terms of risk avoidance and the risk-tolerance culture, there is a gray area in between. The key is balance, give enough autonomy to the business management to make its own decisions on taking or avoiding risks across the business hierarchy with consistency, and put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings. Forward-looking organizations are at the journey for digital transformation, even having a risk-awareness culture is not strong enough to adapt to the changes, at a higher mature level, risk-intelligent culture needs to be cultivated to manage both opportunities and risks effectively.
There is a great deal of uncertainty involved in the risk management process. A well-developed risk-management framework helps the business take a structural approach with all important business elements such as principles, processes, practices, facilitate a structural cycle to benchmark business operations, as well as improve the overall risk management maturity.
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