While concentrating on a presentation for the Mining sector conference recently, it struck me precisely how important gestion des risques is perfect for ensuring that strategic plans become reality. Not simply risk management per se, but fully integrated risk, where pretty much everyone in the organization is involved.
Here’s why. Often risk management responsibilities are allocated to some relatively small number of people with specific functions like safety, environmental management, operations, finance and strategic planning. This tends to resulted in a siloed risk management structure where risks are managed independently with limited communication along with other domains. Many risks remain invisible to other parts of the group because they’re expected to be handled as a part of the daily responsibilities inside a specific domain area, while they have broader impacts. A business-wide method of risk consolidates risks from all domains into a common framework where the implications of risks could be assessed and managed in a way that addresses the full scope in their potential impact through the business.
A key advantage of shifting to a more holistic view of risk is the link in between the risk management process and business planning activities. For instance, risk could be built into the business budget by including cost estimations from threats, expected costs of planned mitigation actions, and potential savings and growth from opportunities. This provides you with a risk-adjusted look at cash flow that is usually better aligned with actual future performance as well as driving stronger financial results.
However, the benefits go much deeper than simply improving income (although that in itself is reason enough). Aligning business objectives with risk handling strategies which may have specific action plans creates a degree of resilience that is certainly proven to improve the chances of meeting performance objectives whatsoever amounts of the organization. Risk management starting at the strategic level and cascading down with the organization enables more efficient decision making, alignment of priorities and effective consumption of resources to mitigate threats and maximize opportunities.
While these top-down risk planning activities are generally annual with updates with a quarterly basis, a bottom-up approach should also be occurring, on a far more frequent basis that deals with changing conditions in a timely manner. Identifying threats and opportunities earlier increases the odds of getting the plan, and enables the organization to address the chance as soon as the treatment cost is at its lowest.
Another part of risk management that is certainly often neglected, for the reason that people don’t have suitable tools, is the level of rigor which is placed on the management of a risk. The nature of each and every risk is highly recommended along with its potential impacts assessed. As an alternative to having a ‘one size fits all’ approach, anyone needs to be able 58dexepky introduce a danger by communicating a proper quantity of information, accompanied by some degree of analysis and treatment that makes sense regarding time, mitigation resources and risk appetite.
A holistic procedure for risk management starts immediately, perhaps like a ‘concern’ before meeting the organization’s standard criteria for a ‘risk’, and extends past the analysis and treatment to add monitoring of actual outcomes, thereby fostering continuous improvement and organizational learning. By using an end-to-end holistic view of risk management, involving stakeholders throughout the business employing a single risk platform where information and knowledge about risks may be shared, organizations develop better foresight and manage risks more proactively, which results in better operational, financial and strategic results.