Enterprise Risk Management is Far-Reaching
Though it might
sound daunting, enterprise risk management is quite simply about striking a
balance between risk and reward within an organization.
When you break it
down, enterprise risk management is about four things: 1) identifying
opportunities relevant to the company’s goals; 2) assessing their potential for
risk; 3) determining both the likelihood and extent of their impact, and 4);
putting a strategy in place to achieve said goals.
Perhaps what is
most surprising is that enterprise risk management—as a process—is a lot more
common than you might expect. In reality, it engages an important cross-section
of an organization’s employees on a daily basis.
Everyone, from board members to those working directly with clients, make
on-the-spot decisions related to risk. Clearly, enterprise risk management is
far-reaching. But it is also multi-dimensional and represents a complex
workplace challenge, which is to say it is unique and has no clear solution.
So if you’re an
organization taking on enterprise risk management, just how do you implement
strategic planning comes into play.
ERM Strategic Planning and Complex
is very similar to enterprise risk management insofar as it entails the
establishment of a strategy or direction for the company. More importantly,
though, it involves elaborating the means and allocating the resources
necessary to get there.
is, fundamentally, about putting the rubber to the road.
And, when you’re
dealing with a complex challenge like enterprise risk management, you need to
make sure that you’re reaching your strategic goals as efficiently as possible.
But how do you
achieve success when you’re tackling something like enterprise risk management,
which involves employees of all stripes? What kind of strategic planning is
necessary? Here's what the experts have to say:
Think about it: if
enterprise risk management engages a broad cross-section of employees within a
company, why shouldn’t its solutions as well?
Many-to-many methodologies are without a doubt the best possible way to face
the complex challenge that is enterprise risk management.
As opposed to the hub-and-spoke model
of problem solving, which relies on a
consultant to create solutions on behalf of the group, many-to-many
methodologies are interactive and participatory. Individuals with various
experience, talents and skill sets come together to co-create a solution so
that strategic goals can be met.
Executing the Solution and Reaping the
risk management is synonymous with growth planning, turning around a brand, and
cost cutting, as well as any number of other strategic goals, it’s essential to
create the buy-in and commitment that makes it all possible.
You need the
people on the front lines and on the top-floors to be equally dedicated to
executing solutions you can be proud of.
difficult to reap the rewards of enterprise risk management when employees feel
overlooked or that their strengths aren’t actively being engaged.
many-to-many solutions, however, you can inspire the kind of collaboration and
exchange among employees that drives execution.
Moreover, when you
provide them with the proper tools through which to channel their
talents—including social technologies like Wikis, crowdsourcing, and idea
sharing conferences—you not only create a dynamic workforce, but more
importantly, you achieve long-term success.