And effective risk management needs to be dynamic and holistic in adapting to the increasing pace of change, improving organizational agility and maturity.
Digital leaders today need to shape the risk intelligence (RI) mindset, build a solid roadmap, and develop a culture of accountability for improving organizational agility and maturity.
It’s important to build a strategic roadmap for risk management: Business disruptions are inevitable, and digital transformation is unstoppable. There are different types of organizations and they are at the different stages of the business development cycle. There are strategic and operational risks. Strategic risk indicates high reward and high risk proportionally. Operational risks impact business reliability on a daily basis directly.
A good strategic roadmap for risk management improves business effectiveness - doing the right things and steering the organization in the right direction; and then, doing things right. Such a planning and roadmap are not static, but need to be dynamic; any adjustments should be made to the plan for adapting to the emerging changes accordingly.
Organizations have to shift from risk-avoidance to risk management & risk intelligence: Most risk managers control risks, but great risk managers see that risk can provide very exciting opportunities for unleashing business growth potential. Risk management must be woven into the fabric and aligned with the business culture and process. Organizations need to have the right dose of risk appetite, set the right appetite for risk management, the risk mitigation processes and practices need to be integrated into a variety of management disciplines, to improve high risk intelligence.
It’s important to integrate corporate risk management into strategy management, so conditions of known risk are amenable to constructing alternative scenarios. Risk management is important, but should be handled and prioritized in such a way that business quality and reliability are part of normality, risk control doesn't negatively impact business flexibility to deliver clear solutions.
Build a culture of accountability and monitor risk management effectiveness: Risk management permeates across organizations and should not be a separate function at all. All people must support it if they need to create risk management effectively in organizations, and improve employees' awareness of short and long-term strategies and objectives. Accountability needs to be in place and understood and reporting then in place, make clarity of individual accountability for business objectives and enhance employees' understanding of policies and risk.
In essence, the underlying themes and balance in risk are centered around cultural and organizational transformation. The top leadership team needs to to increase risk intelligence; not only predict and prevent risks, but also identify opportunities for business growth and improve business maturity.
It’s important to gain a holistic understanding of the business value of risk management, look at the effectiveness of the risk management strategy, methodology, and practice. It’s crucial to enhance risk management logic, enabling the business to shift from risk control to risk intelligence. And effective risk management needs to be dynamic and holistic in adapting to the increasing pace of change, improving organizational agility and maturity.
1 comments:
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