Over the years, I have written a number of articles which have been published on LinkedIn as well as in magazines and like publications.
How risk maps become risk traps
Effective use of risk matrices
Much can and has been said about the fallacies of risk materices. I for one have spoken and written about this for years. However, I have found a relevant risk management process step, where they can be used effectively - a step, which I descibe here. I also note the danger of relying only on this step.
Leverage your ERM as a powerful decision tool
Many companies and organisations have an ERM program as well as some database of enyterprise risks. This is often handled in a separate process - delinked from performance management which is in "violation" of teh ISO 31.000 principle of integration as well as the much repeated statement of risk management mus affect decision making. In this article I demonstrate how easily ERM data and the insights embedded can be leveraged to enhance e.g., budgeting in a company.
I have advocated the use of data and facts when evaluating risks, uncertanties and levers. However, as this piece describes, it is pivotal that the data and facts leveraged are valid to the issue in point. Otherwise, there is a risk of severe errors.
Successful is based on two components. One is making good decisions on what to do and not to do. The other, and equally important (but often overlooked) is implementing decisions effectively - which is where risk management comes in as a valuable tool.
Effective risk reporting is not about reporting on a risk portfolio, but rather a performance reporting with risks in mind. One useful approach is showing/reporting the likelihood of meeting targets. As is such, this should be embedded in the performance reporting done already.
The wave of Coronas is upon us, and much has changed, some for good. The next wave we are seeing building up already is that of climate change which will be bigger, longer and lead to bigger changes. As risk manager, you should prepare for this now, if you are not already.
Different industries experience different volatilities. A lot of resilience and efficiency can be addressed effectively by designing your business system. This article - largely an extract of Prepare to Dare chapter 5, describes this pre-emptive approach to intelligent risk taking.
Risk management is organised using many different set-ups in different companies. Consultants and auditors have strong opinions on how to do this as well. In this article I argue there should not be a risk management organisation at all … rather a fully integrated processual approach.
COSO has issued a guide to risk appetite and risk tolerance - where the use of the terms is exactly opposite to that of the ISO definition of 2009. I address and the useful application of these terms.
Executives find and boast that during the Covid-19 pandemic and lockdowns, organisations are shown to be more agile, decisive and effective than ever before. This article "urges" executives to hold on to the qualities as business conditions after the pandemic and subsequent financial crisis will continue to be volatile.
In the spring of 2020 a Corona virus named Covid-19 is rampaging the world leading to governmental induced lockdowns to limit viral spreading. From a risk management perspective it is however, also important to address the aftermath of the virus attack. This article addresses this.
Projects fail more often than what is desirable and still methods and approaches to manage projects remains largely the same. In this article I address 5 common reasons, and provide guidance as to what it takes to enhance performance.
The tools and techniques of a risk manager, e.g. Monte Carlo simulation can effectively be applied to and enhance other business areas as well. In this article, I address the option of enhancing manufacturing capacity planning in an world of uncertainty.
Risk management standards and best practice highlight that risk management must affect decisions to be effective. Any decision has two components. The WHAT to do, which cannot be risk managed, and the HOW to do it, which can and should be risk managed. The distinction has consequences for how to effectively impact decision making.
To many risk manager and executives the concept of managing is opaque and difficult to handle … and they end up doing nothing. Yet scandals of many kinds from all kinds of industries all over the world shows the topic of reputation is important. This article addresses seeks to make the issue tangible and actionable.
The concept of strategic risks actually spans over three levels which again call for three different approaches to management as one level is poorly served with the approach of another level. This piece describes what and how.
Traditional risk management is becoming increasingly obsolete, and risk managers need to upgrade their positions in order to continuously add value and be relevant for companies. This article provides some perspectives to this.
A heat-map or a risk matrix is one of the most controversial tools in risk management. Whereas traditional use is useless and sometimes even wrong, there is a better way of using a matrix for reporting purposes. This article indicates how.
Decision risk management is relevant for big strategic decisions as well as smaller, and even day-to-day decisions. Especially to cater to the latter, this article is an approach, which can be applied mentally and within the timeframe of making a decision - and scaled to cover the large, complex and expensive decisions.
Moving from traditional into decision focused risk management is a challenge, and may be overwhelming to some - don't worry. The key difference is timing and all of your traits as risk manager comes to good use in decision focused risk management as well.
Risk management has for years been built on a frame of reference emerging from Finance, Audit or Insurance functions. This may not be optimal, and I here suggest leveraging the paradigm of Quality Assurance as the frame of reference for risk management.
The 4th industrial revolution speaks about the digitalization of "everything". This is predicted to lead to disruptions and risks. However, it will also lead to opportunities like the world has never seen before. Balancing this with optimal risk taking is not easy, but well worth while.
Risk management specialists have to step up and add value by focusing on optimizing business performance to stay relevant. This invokes new processes and required new skill - compared to traditional risk management approaches.
Most risk management is focused on reducing the likelihood and impact of adverse events. The proactive also look for intelligent risk taking. Still - now and then disaster hits, and now the active risk management has to stand it test of real life.
Risk management has evolved, and two essentially different approaches has emerged. The traditional risk centric management of taken risks, and the emerging performance centric management of risk taking.
The ISO 31000 has been updated from the 2009 version to a 2018 version. This is a more focused edition, without any major changes - but repeatedly highlighting the need for risk management to be an integral part of decision making.
This report has just be released, and shows some progress - but alas only a little, and in some ways - in the direction of more bureaucracy and control, and less towards effective decision and intelligent risk taking. In the below, I comment on the key findings.
Gareth Byatt of Risk Insights and I have co-authored this article on the opportunity of leveraging the ever increasing speed of change. The article has been published January 2018 on Strategic Risk/Europe and as a series of three smaller pieces in Strategic RISK Asia/Pacific
The world is changing and machines will take over any task and job that can be described systematically to any degree. What will be left for us humans are jobs based on creativity and empathy. Preparing todays children for tomorrows means we need to teach these subjects explicitly.
Project risk management is more than ensuring delivery on time/on budget. This article describes how holistic risk and opportunity management for projects can vastly enhance the value and success rate of a project.
All organisations live in a world of uncertainties. These can be leveraged as strategic competitive advantages by applying the tools and approaches of risk management in the decision making and strategy processes.
The level of managing risks depends on your risk tolerance, yet many companies have not defined this. By knowing what level of risk, you are prepared to take, you can leverage this to take on more risks in pursuit of higher aspirations.
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