Riskology

Today, organisations are facing a multitude of uncertainty and potential risks that are seemingly everywhere. Ongoing rapid technological advances are increasing the potential for large scale data breaches. Thankfully, a flexible and dynamic risk management approach can do much to mitigate this heightened and ever-evolving level of risk.

The effects of climate change are being felt in a variety of ways, with more frequent and severe natural disasters already affecting the profitability of many businesses. Not to mention the ongoing health crisis of the pandemic and the increasing volatility of global financial markets. To help, we share 5 essential steps to delivering dynamic risk management strategies in your organisation.

Step 1: Redefine risk management goals

Dynamic risk management must be built from the ground up, starting with an analysis of your overarching goals. For many organisations processes that are designed around prevention or mitigation alone must be elevated to enable a more strategic approach that creates higher value. For example, providing clear definitions around risk appetite and risk levels ensures the risks that are most important can be easily identified and prioritised. In addition, many risks have the potential to impact the business in a broad range of areas and ways, which is why a big-picture view and understanding of the enterprise as a whole, rather than assessing risks in isolation, is an essential part of a dynamic response.

Step 2: Create agile risk processes   

A key element of dynamic risk management is the ability to make rapid decisions when required. Adopting an agile approach that enables this to happen requires team members with the right skills on board who can quickly assess the nature of risks as they arise. This does not replace the function of committee reviews, however a clear and transparent view of the type of situations where decisions can be simplified, streamlined or made by single responsible parties if needed can help managers avoid getting bogged down in drawn out processes when a rapid response is required.

Step 3: Enhance your data and analysis

These days, there is a multitude of technology and software available to help you better understand and utilise data related to risks, which can enhance the effectiveness of your processes significantly. Specialised software such as our Enterprise Risk Management Module allows you to collate and interpret analytics into meaningful data that informs risk management strategy. This allows you to more easily and more frequently assess, review and improve your processes for maximum agility and effectiveness.

Step 4: Strengthen the risk culture

When you set the tone for ownership and responsibility of risk management from the top, you create a culture where risks are faced with unity and resilience. This can be seen and felt on a day to day level through clear and transparent dialogue and definitions, and at an enterprise level where there is true accountability and responsibility in the way risks are defined, measured, managed and reported. Importantly, a healthy risk culture requires ongoing reinforcement and attention to ensure it stays strong, especially in the face of the many challenges happening right now.

Step 5: Invest in and develop talent 

Another key aspect of dynamic risk management lies in the ongoing development of your people. By providing training and support to your team on the various aspects of effective risk management, you will improve future outcomes. This begins with knowledge of how the business operates on a whole, as well as a thorough understanding of the landscape of risk. In addition, effective risk managers must be able to utilise the available technology to better use and interpret available data and analytics, as this is an essential element in creating an agile and dynamic risk management response.

Start thinking dynamically about risk management today.

If you’d like to find out how our Enterprise Risk Management Module can support your organisation in developing dynamic risk management, get in touch with our team on 03 9918 0050 or register for a free trial today!