Risk Commentary

We promised to start the discussion of the all-important risk identification process - High Quality Risk Assessment. The first step is actually to check and fix the organization’s planning practise!

Show Notes

SHOW NOTES

Main points
              


Longer Term Agenda: High Quality Risk Assessment

1. Investigate and fix the planning practice.
2. Establish the context
3. Identify risk
4. Evaluate Risk
5. Risk mitigation and review
6. How to conduct the High Quality Risk Assessment session

Today’s agenda
We can only address point 1 today: investigate and fix the planning practice. We cannot start straight in with risk ID! We must prepare by scrutinizing the organization’s planning regime! I think you will find it an important key to successful ERM.


Why this obsession with the planning practice in the organization?
Why can’t we simply start with risk identification?

The intuitive, informal approach -- does it work?

The importance of the planning language.

The spectrum from non-planning, to plans (improperly formulated), to plans (unsubstantiated).

Properly formulated goals.

Properly informed goals.

The economic reasons for planning and risk management: the crucial point in the development trajectory of business organizations, as well as public agencies and non-profits.

Planning and risk management regimes are crucial to the evolution of the organization.

Conclusions: we need proper planning as the logical precursor to risk management. 


Complete planning practice

Strategic identity
- self-identification: unique competitive advantage
- special relationships; clients and constituents- mission
- values
- capacity for change

Looking outward
- environmental scan
- stakeholder analysis 

Synthesis
- vision
- gap analysis
- formulation of goals and objectives 

Beneficial psychological effects of engaging staff in planning process.

Summary: Let’s review what we’ve covered today.
1. High Quality Risk Assessment is a precise method: the core practice that generates value in the ERM regime.
2. We cannot start with risk ID, but must discuss the planning practice of the organization.
3. Many organizations will be deficient in the documentation, formulation or background research.
4. At a crisis point in their development, firms have to build proper management systems or experience mediocre performance. 
5. We can suggest the steps in a complete planning process.
6. As staff participates in research and planning, the company can experience a profound renewal.
7. 80% of the risk management team’s work could be to investigate and gain cooperation to improve the whole strategic and operational planning practice. The benefits, however, are significant.

KEY QUOTE
We must have proper planning as the logical precursor to enterprise risk management. Yet we ask: “Why do so many strategic plans end up on the shelf? It’s curious, given that strategic planning is among the most popular of management tools.” (Robertson, 2019, p. iv)

LINKS 
E.Robertson Strategic Planning: Process, Templates and Effective Implementation (2019)

What is Risk Commentary?

We see a striking contradiction in all businesses: the sharply increasing need for Enterprise Risk Management, as opposed to risk managers' persistent reports of low perceived value of their own processes. Correctly implemented, High Quality Risk Assessment will not only address uncertainty, but even solve chronic business problems. Join Edward Robertson, successful ERM practitioner and thought leader, to discover a simple process that delivers clear value.