The term risk takes on a new meaning to forward thinking organizations. As noted by a leading Enterprise Risk Management software provider, Logic Manager, it is a Risk Based Approach to Business.
Risk is the overarching theme across all business areas. It resides in operations, shared services such as IT, HR, finance and other dimensions including, compliance, geographic regions and strategic initiatives to name a few. In addition to these risks, executives also face the risk of governance efficiency, things such as silo’d activity, scattered information, misalignment of priorities and unknown relationships that have a direct effect on the bottom line.
As companies get larger the challenges are real and there are many pieces to the puzzle. In fact, it appears so complex that some companies never make it to the point they start pulling the most important pieces together. Like a deer in the headlight they stand motionless doing what has always been done and can’t get started making valuable connections that have a bottom line impact.
Putting the Puzzle Together
How do you get started? In short you count the pieces, do the edges and look for the connections.
Count the Pieces
Did you ever do the hard work on a puzzle only to find that many of the pieces were missing. The starting point is pretty straight forward. Identify the pieces you are dealing with. In most organizations the pieces are known but not clearly defined.
Do the Edges
Start with the low hanging fruit. In a complex puzzle you go straight to the edges. It takes an overwhelming amount of pieces down to something you can manage. Once it gets started, there is still hard work but it makes it easier to pull together. Begin complex puzzles/ business initiatives in areas that can be used as a foundation to pilot and demonstrate repeatable processes.
Look for the Connections
As you are shifting through the many remaining pieces, the colors and shapes become very important. Build your foundations on taxonomy (systematic classification) that can help identify and take advantage of natural connections that do not normally get made.
Organizations may have the best people, resources and intentions to move initiatives forward, but if they can’t find a logical starting point, it all breaks down and the status quo never turns into a completed puzzle. A risk based approach to business should not take longer than 6 months to get off the ground. In fact, if the puzzle is mapped out correctly, significant value can be demonstrated in 90 days.
Author Mark Bennett, Founder of Risk Innovation Group (RIG), is dedicated to helping large employers face the complexities of risk through innovative Enterprise Risk Management (ERM) practices. ERM programs don’t just help large employers manage business risks more effectively; a well-developed ERM program can protect and create value as well as improve business performance and generate a strong competitive advantage. Contact: firstname.lastname@example.org