Initiativesofriskagility

Risk management as a discipline with consistency, intends to manage enterprise risk systematically.

In face of unprecedented opportunity and risk for organizations today, it is nevertheless true that change itself has become unpredictable and evolutionary, business leaders today can’t predict every turn or curve on the journey. There is a great deal of uncertainty and ambiguity involved in the risk management process. There are strategic risks, operational risks, and systemic risks, etc. The efforts on identifying, integrating, measuring and managing risk systematically are critical to build business advantage in the long run.

Initiate top down driven risk management activities: In face of “VUCA” reality, risk identification is a crucial step in managing risks. An effective approach to strategic risk management is to get more senior management and board involvement, take charge with risk issues and have been seeking to improve their ability to define and communicate an enterprise-wide message about healthy risk appetite and a variety of possible situations and risk scenarios clearly.

The greatest risk in the organization will be a business reputation issue that is not being properly identified or managed. It’s also crucial to integrate risk identification and assessment into multiple management disciplines, enhance the detection of future strategic risks and predictions of future performance with a high level of accuracy.

Initiate risk review and monitoring of high-risk business initiatives: Too few business enterprises have appropriately aligned or devoted sufficient resources to their respective risk, compliance, ethics, governance efforts. Selection of business initiatives portfolio should be in line with corporate risk appetite; need to be appropriately integrated, with decent reporting structuring and streamlined processes.

In practice, many of the difficulties in risk review come from subtle psychological factors. Those that see risk with pessimism are more likely to avoid risk management altogether, but when they do often, risks are overstated and cause business stagnation. Those that take a very objective view of risk are more often than not the ones who come up with innovative ways to turn it to their advantage.

Set risk policies and standards: There has to be a reasonable level of proficiency presumed in a risk management program. Information analysis is a key enabler to help you achieve strategic business objectives. Information-based risk intelligence can make the organization more resilient, not by controlling risk, but by setting the right level of guidelines and enforcing risk management disciplines.

So principles over rules; empowerment over control, engagement over command, autonomy over mandates, heterogeneity over homogeneity, etc. By following a set of well-defined risk management principles or rules, the business management cycle could be viewed as resulting in emergent means of reorganizing organizational structure, refocusing on strategic goals and reinventing business.

With faster pace of change, unprecedented uncertainty and ambiguity, risk management is a broad concept which spans the organization from business strategy to operations. Risk management as a discipline with consistency, intends to manage enterprise risk systematically, streamlining business processes, to ensure that all such risks are revisited and reaccepted as to minimize the risk raised; the current risk management systems and processes are highly automated, strategic to achieve high performance.

Posted in: Business Intelligence,GRC