Risk Management Program vs. Risk Management Approach

These are two very different concept for mitigating risks. Keep in mind that every business has risks that adversely impact their profitability and ultimately their future growth opportunity. So doesn't it make sense to have a risk mitigation strategy that can support your strategic goals and does not require significant resources - both staffing and dollars. Traditional risk programs are reactive in nature and take valuable resources away from your core business.

Risk mitigation should not be based on control performance as current risk management programs espouse but rather on knowledge of common risks that can occur and ensuring effective strategies for resolving them. Strategies that can be continuously monitored and remediate as needed by determining a new and long-term solution. Functional level management is keenly aware of significant issues that pose threats to operational performance; however, it is contained in a relative silo and therefore may not be properly addressed in a timely manner. This results in problems or issues resolutions that tend to take a "fire-dill" approach that provides merely short-term and immediate resolution. Having said this, let's further consider that functional management also has knowledge of metrics/key performance indicators again in a silo approach as these measures focus on operational performance. But ask yourself the question "Does operational performance not depend on eliminating or at least reducing the potential for adverse events?" If we believe this to be true, then operational performance depends on risk mitigation. But we must temper this and not implement unnecessary and rote programs that are reactive and provide minimal safeguards against adverse events.

Let's turn the page to a more proactive and positive way to handle the interrelationship between risks and performance. By the proper alignment of issues and KPIs, functional management has a ready-made and proactive risk approach. Notice I used the term risk approach not risk program. This is because a risk approach allows you to embed risk management and mitigation into managements daily activities and responsibilities.

"Risk Management and Key Performance Indicators" is a publication available today on Amazon that can provide details on how this risk "approach" can work for you.

Additionally, we have developed an artificial intelligence tool that can assist management in defining risks, not only those that are directly related to their area but also cross-functional risks that can have an impact on their performance. Again, in today's environment these risks go unnoticed until they become a problem for both the owning function and the dependent function. A demo is available on request through email: prorisksolutionsllc@gmail.com or call us at 440-465-6993.

In the current fast paced and changing business environment businesses need to take every effort to retain competitive advantage, profitability and customer satisfaction. A Risk Management Approach can significantly add to your ability to meet these challenges!

Risk Management at Your Fingertips!