An effective approach to risk management is to integrate risk identification and assessment in multiple management disciplines, enhance the detection of future strategic risks and predictions of future performance.
Organizations face risks every day; the more diverse, the more regulated, the more geographically dispersed an organization becomes, the more important an integrated risk management approach becomes.
Business professionals today need to have confidence, candor, and professional humility to understand oneself, understand others, understand surroundings, understand their organizations inside out. There is the risk that you might be stuck with the varying cultural friction, which includes individuals not ready to change, not collaborating with other team members or cross-team smoothly. There are also risks for individuals not inclined to learn how to behave with self-disciplines. not taking a balancing act to explore better ways to do things, for unlocking performance consistently.
On an adventure, there is no risk; in order to accomplish the impossible, one must be able to see the invisible: In business, every day is a risk, as long as risks have been identified and agreed with stakeholders as per business needs, you can find regularity in chaos, capture trends and opportunities from uncertainty. Always have a clear goal in mind in order to overcome challenges; always observe deeper, see around the corner, see invisible clues underneath business management.
When you place the “To-Be” state first, it creates a paradigm shift in your approach. Capabilities deficiency, hidden risks, performance bottlenecks can be quickly discovered. Organization management for making its own decisions on taking or avoiding risks, and put in place a mandated risk tolerance structure via escalation requirements based on current risk ratings.
Organizations have the right dose of risk tolerance and initiate a balanced approach to manage risks and opportunities smoothly: Risk-tolerance means that everyone involved owns and becomes more aware of their own impact on the culture of the organization around them. It is difficult to do and it’s often uncomfortable to hear. But it’s a necessary step and a secret source to lead radical change. You have sufficient information to establish probabilities of alternative outcomes and the expected impact of strategic alternatives. The information based risk management approach makes a smooth transition from risk mitigation to risk intelligence.
Since nearly every decision impacts future events that have yet to happen, and increases clarity of individual accountability for risk management. It’s important to bridge the knowledge gap between socioeconomic and cultural differences to make it happen. It’s critical to increase corporate reputation capital, manage “gray areas” effectively, reduce business friction and handle conflicts or uncertainty smoothly; overcome the fear associated with a variety of risks, and make a smooth shift from risk control to risk intelligence.
For leading organizations, corporate risk management is already an integral competency and top priority for C- executives. An effective approach to risk management is to integrate risk identification and assessment in multiple management disciplines, enhance the detection of future strategic risks and predictions of future performance.