Though it might sound daunting, enterprise risk management is quite simply about striking a balance between risk and reward within an organization.
When you break it down, enterprise risk management is about four things: 1) identifying opportunities relevant to the company’s goals; 2) assessing their potential for risk; 3) determining both the likelihood and extent of their impact, and 4); putting a strategy in place to achieve said goals.
Perhaps what is most surprising is that enterprise risk management—as a process - is a lot more common than you might expect. In reality, it engages an important cross-section of an organization’s employees on a daily basis.
Everyone, from board members to those working directly with clients, make on-the-spot decisions related to risk. Clearly, enterprise risk management is far-reaching. But it is also multi-dimensional and represents a complex workplace challenge, which is to say it is unique and has no clear solution.
So if you’re an organization taking on enterprise risk management, just how do you implement successful strategies?
That’s where strategic planning comes into play.
ERM Strategic Planning and Complex Challenges
Strategic planning is very similar to enterprise risk management insofar as it entails the establishment of a strategy or direction for the company. More importantly, though, it involves elaborating the means and allocating the resources necessary to get there.
Strategic planning is, fundamentally, about putting the rubber to the road.
And, when you’re dealing with a complex challenge like enterprise risk management, you need to make sure that you’re reaching your strategic goals as efficiently as possible.
But how do you achieve success when you’re tackling something like enterprise risk management, which involves employees of all stripes? What kind of strategic planning is necessary?
Think about it: if enterprise risk management engages a broad cross-section of employees within a company, why shouldn’t its solutions as well?
Many-to-many methodologies are without a doubt the best possible way to face the complex challenge that is enterprise risk management.
As opposed to the hub-and-spoke model of problem solving, which relies on a consultant to create solutions on behalf of the group, many-to-many methodologies are interactive and participatory. Individuals with various experience, talents and skill sets come together to co-create a solution so that strategic goals can be met.
Executing the Solution and Reaping the Rewards
Because enterprise risk management is synonymous with growth planning, turning around a brand, and cost cutting, as well as any number of other strategic goals, it’s essential to create the buy-in and commitment that makes it all possible.
You need the people on the front lines and on the top-floors to be equally dedicated to executing solutions you can be proud of.
It’s very difficult to reap the rewards of enterprise risk management when employees feel overlooked or that their strengths aren’t actively being engaged.
By employing many-to-many solutions, however, you can inspire the kind of collaboration and exchange among employees that drives execution.
Moreover, when you provide them with the proper tools through which to channel their talents - including social technologies like Wikis, crowdsourcing, and idea sharing conferences - you not only create a dynamic workforce, but more importantly, you achieve long-term success.