Tuesday, March 21, 2023


Strong risk management disciplines will balance performance and compliance, and improve organizational resilience ultimately.

The world becomes over-complex, uncertain, and ambiguous, the ecosystem dynamic allows the organization to morph as the business conditions and organizational capacities for change to allow a better fit. 

Organizations should seek to improve their ability to define and communicate a clear, consistent, enterprise-wide approach about setting healthy risk appetite and a variety of possible situations and scenarios to improve business resilience.

Good risk management needs to provide the strategic light and tactical angles to the issues of local, national and global efforts and challenges of changing working environments: Because the context for corporate risk management includes a wide range of circumstances and capabilities which are subject to constant variability. There’re a growing number of organizations that have shifted their risk management orientation from bottom-up to top-down, with more senior management and board involvement, to take charge of risk issues.

There are both strategic and technical perspectives to manage risks. There are "human factors" such as irrational, cognitive, or behavioral aspects to be considered in optimizing risk management. We can't and won't be able to manage or predict but by mapping and measuring complex interactions in real-time, organizations can gain early warning, anticipatory awareness of possible/plausible negative impact.

From the investment perspective, risk intelligence is the next big frontier for risk management:
As we’ve been living in a more complex and interconnected world, current risk management systems and processes are not highly automated, strategic and technology risk management are complex and costly. The top-performing companies implemented on average twice as many of the key risk management capabilities as those in the lowest-performing group.

After understanding the business strength and weakness, the dynamic market conditions, the next stage of risk management should surely be to define the organization’s appetite for risk, then how to improve risk intelligence smoothly. From risk mitigation to risk management and intelligence, business managers are able to visualize and identify and convert uncertainty to risk through the application of quantification methods to manage uncertainty as risk, and move up risk management maturity.

Innovative risk managers see that risk can provide certain opportunities for business growth: Like quality, risk identification or prevention is everyone’s business Do people need to be forced to comply with risk management activity or do they naturally consider it as part of their daily job? 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.

Because without good risk management, the opportunities which it creates cannot be properly transferred into value. Process management helps every layer of organization to make rational judgment and decision via well crafted process, embed customer/operational data, to improve risk intelligence, and build a more resilient organization with rapid growth.

Risk Management is both for top-line business growth and bottom-line compliance and security. The greatest risk is the weakest link of your organization, usually people. Strong risk management disciplines with a multitude of choices to serve customers, engage employees, develop products/services, increase risk intelligence with business flexibility will balance performance and compliance, and improve organizational resilience ultimately.


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