Risk management, or at the higher level, risk intelligence becomes a strategic imperative for business change or innovation.
In reality, too few business enterprises have appropriately aligned or devoted sufficient resources to their respective risk, compliance, ethics, governance efforts. More and more responsible shareholders are also realizing that the short term investment mentality or reckless management style is short-sighted and will eventually lead to risks. So they need to be appropriately integrated, with streamlined processes to improve risk management effectiveness.
It’s important to manage risks and improve decision coherence: Assuming the risk is highly likely to occur, most of today's risk and risk management is reserved for huge and costly endeavors. The problem with this is that poor decision-making and lack of risk awareness creates more blind spots uncovered and gaps unfilled. Also, poor decision-making excludes consideration of stakeholders and their reactions to decisions. The combined costs of many decisions without risk intelligence can be staggering, or even devastating to their business.
Thus, to improve business risk intelligence, business management needs to define organizational risk appetite and risk attitude so they know the business tolerance of their enterprise for the resulting downsides risks. Even though many of decisions, and related risk management may seem minor, the process should be there. Once a decision maker is in the regimen of performing risk management for all decisions, the process becomes routine and easier to complete. Corporate management needs to imagine with many experiences involved in current or in the past for improving decision effectiveness, apply interdictive analysis as a tool to estimate the impact of upcoming events that may happen in strategy/operation plans, and the consequences, as well as how to avoid unnecessary pains, and improve overall business effectiveness.
It’s important to manage risks and improve decision coherence: Assuming the risk is highly likely to occur, most of today's risk and risk management is reserved for huge and costly endeavors. The problem with this is that poor decision-making and lack of risk awareness creates more blind spots uncovered and gaps unfilled. Also, poor decision-making excludes consideration of stakeholders and their reactions to decisions. The combined costs of many decisions without risk intelligence can be staggering, or even devastating to their business.
Thus, to improve business risk intelligence, business management needs to define organizational risk appetite and risk attitude so they know the business tolerance of their enterprise for the resulting downsides risks. Even though many of decisions, and related risk management may seem minor, the process should be there. Once a decision maker is in the regimen of performing risk management for all decisions, the process becomes routine and easier to complete. Corporate management needs to imagine with many experiences involved in current or in the past for improving decision effectiveness, apply interdictive analysis as a tool to estimate the impact of upcoming events that may happen in strategy/operation plans, and the consequences, as well as how to avoid unnecessary pains, and improve overall business effectiveness.
It’s crucial to manage information technology risks as IT is costly, but a key business success factor for running modern business: Traditional IT organizations act as the controller to avoid risk, IT leaders have tried to reduce technology and IT risk as much as possible, with a risk avoidance mentality, it might lose some opportunity to grow the business. Digital IT needs to move from risk avoidance to risk mitigation to risk management and intelligence.
Risk management needs to be integrated into information technology management in a complementary fashion for leading organizations forward by avoiding barriers and pitfalls on the way; integrating GRC practices to improve business agility. IT leaders’ mentality needs to shift from 'risk-avoidance' to 'risk management' and risk intelligence, they weigh risk, and reward, take prudent risks and find ways to mitigate risk rather than eliminate it, and embrace business growth opportunities proactively.
It’s critical to manage organizational reputation risks and improve business brand value: Reputation is part of the personal or business brand, and the brand usually reflects the personal and enterprise reputation. Organizational reputation is the overall estimation in which the company is held by its shareholders based on its past, current, or predictive future actions and behavior. You can't and won't be able to manage or predict every risk. Reputational risk is often caused by blindness of conventional risk management practitioners to the shortcomings of the incomplete solutions. Risk management is crucial for achieving business results and building a solid business reputation.
The organization's brand equity is the key asset of concern when it comes to the question of reputational risk. If the management has put in place effective risk management processes for protecting business brand and reputation, mapping and measuring complex interactions in real-time can gain early warning with anticipatory awareness of possible negative impact on reputation management. It helps to clarify what the brand stands for, how the company wants its stakeholders to see and perceive the brand name and the connotation it wants its stakeholders to associate.
Risk management, or at the higher level, risk intelligence becomes a strategic imperative for business change or innovation. The efforts on identifying, integrating and managing risk are critical to build business advantage in the long run. To develop the next management practice to improve business intelligence, businesses weigh risk and reward, take prudent risks and find ways to mitigate risk rather than eliminate it, and drive change large or small proactively.
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Indus Valley Mukteshwar is a positive, proactive, result-driven company with a decade of experience in the construction segment.
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