Risks generally take many forms across many businesses. There are catastrophic characteristics and there are routine risks that many businesses and organizations encounter. There are risks that are well known and well anticipated while others are generally unknown. Perhaps the only certainty for most businesses in an increasingly competitive business environment is that there is a very fast rate of change in the business landscape. There are numerous factors that are contributing to this fast rate of change. These include new competitive forces, technological forces, the complexity of doing business, regulatory scrutiny for these businesses and even an increased reliance on third parties for various services and processes. Thanks to these complexities confronting businesses, it is important that they invest in enterprise risk management services that will help them in managing risk.
Organizations that invest in enterprise risk management are able to develop risk resilience. They are able to carry out an objective assessment of their risk management capabilities and also evaluate the organizational culture when it comes to risk management. Organizations that implement sustainable enterprise risk management practices generally see greater reward and performance in their business.
Exposing Risks in an Organization
The main challenge that many organizations face is how they can structure their enterprise risk management programs in order to expose the threats that the organization faces and which it has not even considered or identified. See more at Bryan Whitefield
Some of the risks that will pose the most serious threats to many organizations are not even known to the senior management staff that makes key decisions in the company. Clues are always there at the front lines of the organizations, in the low level or mid-level employee base. The risk factors that may not be familiar to those at the top are quite familiar to those who are at the bottom. Employees generally encounter these risks on a day-to-day basis but due to communication failures, these issues are not passed up to the senior management executives. The risks are not taken up to the appropriate level where some concrete action could be taken.
Developing Risk Leadership
Organizations can use various metrics in order to improve their ability to uncover some of the unknowns in their business processes. These are the metrics that will help the organizations in benchmarking their enterprise risk management strategy.
The first that you should undertake is ensuring that the personnel involved in individual supervisory roles are also involved in your risk management program. A good risk strategy should involve at least 25-30% of the company staff.
It is also important to have avenues through which employees could voice their concerns. Have a system in place that will regulate how these concerns will be reported and also followed up on. These can include incidence tracking systems and compliance hotlines that companies can use in order to identify and carry our risk assessment.
It is also important that the senior management acts on the employee concerns. When staff members are not seeing concrete action on their concerns and reports, they will not raise those concerns in the future and that weakens the organization’s position. Organizations can develop a risk prioritization process that will ensure proficiency in risk management.