Organizations have to shift from a risk-avoidance to a risk management to risk intelligence.
Solid risk management enables the accumulation of enough corporate resources to thrive by capturing opportunities in it and adapting to the uncertainty and changes smoothly.
Incorporate solid risk management practices into good strategy management disciplines: In business, every day is a risk. Risk management may require a lot more future vision as well as a strategic mindset. In fact, strategic risk management is a critical component of business strategy. Without solid risk management, quite a lot of roadblocks or hidden pitfalls would prevent the implementation of the strategy or operational plans from achieving the cleared defined goals.
Systemic risks concern the external business factors that can affect the delivery of any set of business objectives. Strategic risk indicates high reward and high risk proportionally. Operational risks directly impact business reliability on a daily basis, etc. Organizations should tailor their methodology and approach to manage various business risks effectively, and keep the organization intact by ensuring sustainability.
Organizational risk management has to be expanded into enterprise opportunity management: More often, businesses are looking at risk in a negative context but to grasp opportunities for growth; insightful leaders in cross-industrial sectors are the best practitioners for improving risk intelligence of the organization. They keep clarifying: What are potential risks and opportunities, can we prepare for those emerging changes timely to achieve expected results? Etc.Once the strategy is in place, then there is a focus on managing the threats that may hinder business achieving the new objectives. Innovation management is about identifying and managing opportunities to generate high business value.
The majority of today's business value is based on their ability to manage complexity, identify the potential business growth opportunities, understand opportunities, roadblocks, decide which one to go after, and clearly articulate forward the way value will be created. Usually, risk and reward are proportional from a management perspective. Not only must you put in place strategies to protect the value in the business, but value must be created, the company must grow, and good opportunity assessment is vital in unleashing the potential of the organization.
Risk management is very useful for building a solid business reputation: People are still the weakest link in Risk Management, they usually are the greatest source of risk -both downside risk and upside risk. Many companies are inside-out, operational driven, unsatisfied customers cause problems related to reputation, credibility, brand name. Often a big risk is that the risk management system is detached from the real management of the business. Without a holistic risk management approach from outside-in perspective, organizations could be vulnerable due to silo mentality, stakeholders’ conflicts, unhealthy competitions, customer dissatisfaction, business ecosystem dynamic, etc. It’s important to clarify what the brand stands for, how the company wants its stakeholders to see and perceive the brand name, as well as the connotation it wants its stakeholders to associate with. So the business management can put in place effective GRC processes or mechanisms to improve risk intelligence.
There are "human factors" such as irrational, cognitive, or behavioral aspects: Risk management is very useful for achieving business results. If the management has put in place effective GRC processes for protecting business brand and reputation, it helps to clarify “Vision" is a destination and 'innovation' is the better process, tools, cultures, etc., to get you there, while assessing long-term risks as part of the overall strategy process. The efforts on managing risk holistically in a more integrated fashion are critical for the long run, as financial performance is highly correlated with the level of integration and coordination across risk, control and compliance functions.
Most risk managers control risks, but great risk managers see that risk can provide very exciting opportunities for unleashing business growth potential. Organizations have to shift from risk-avoidance to risk management & risk intelligence. Businesses management weigh risk and reward, take prudent risks and find ways to mitigate risk rather than eliminate it, and drive change proactively. Risk management is not an isolated discipline, but an integral solution that improves business agility, risk intelligence, and maturity in a structural way.
Systemic risks concern the external business factors that can affect the delivery of any set of business objectives. Strategic risk indicates high reward and high risk proportionally. Operational risks directly impact business reliability on a daily basis, etc. Organizations should tailor their methodology and approach to manage various business risks effectively, and keep the organization intact by ensuring sustainability.
The majority of today's business value is based on their ability to manage complexity, identify the potential business growth opportunities, understand opportunities, roadblocks, decide which one to go after, and clearly articulate forward the way value will be created. Usually, risk and reward are proportional from a management perspective. Not only must you put in place strategies to protect the value in the business, but value must be created, the company must grow, and good opportunity assessment is vital in unleashing the potential of the organization.
There are "human factors" such as irrational, cognitive, or behavioral aspects: Risk management is very useful for achieving business results. If the management has put in place effective GRC processes for protecting business brand and reputation, it helps to clarify “Vision" is a destination and 'innovation' is the better process, tools, cultures, etc., to get you there, while assessing long-term risks as part of the overall strategy process. The efforts on managing risk holistically in a more integrated fashion are critical for the long run, as financial performance is highly correlated with the level of integration and coordination across risk, control and compliance functions.
Most risk managers control risks, but great risk managers see that risk can provide very exciting opportunities for unleashing business growth potential. Organizations have to shift from risk-avoidance to risk management & risk intelligence. Businesses management weigh risk and reward, take prudent risks and find ways to mitigate risk rather than eliminate it, and drive change proactively. Risk management is not an isolated discipline, but an integral solution that improves business agility, risk intelligence, and maturity in a structural way.
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