While working on a presentation to get a Mining sector conference recently, it struck me just how important gestion des risques is made for making certain strategic plans become reality. Not merely risk management per se, but fully integrated risk, where basically everybody in the organization is involved.
Here’s why. Often risk management responsibilities are allocated to your relatively small selection of those that have specific functions like safety, environmental management, operations, finance and strategic planning. This has a tendency to cause a siloed risk management structure where risks are managed independently with limited communication with other domains. Many risks remain invisible with other parts of the organization because they’re likely to be handled as a part of the daily responsibilities within a specific domain area, whilst they have broader impacts. A business-wide approach to risk consolidates risks coming from all domains right into a common framework where implications of risks can be assessed and managed in a fashion that addresses the full scope of their potential impact during the entire business.
An integral benefit of shifting to some more holistic view of risk is the link involving the risk management process and business planning activities. As an example, risk might be built into the corporate budget by including cost estimations from threats, expected costs of planned mitigation actions, and potential savings and growth from opportunities. This supplies a danger-adjusted take a look at income that is generally better aligned with actual future performance while also driving stronger financial results.
However, the benefits go much deeper than merely improving cash flow (although that in itself is reason enough). Aligning business objectives with risk handling strategies who have specific action plans creates a level of resilience that is proven to boost the chances of meeting performance objectives whatsoever levels of the organization. Risk management starting at the strategic level and cascading down with the organization enables more effective making decisions, alignment of priorities and effective usage of resources to mitigate threats and maximize opportunities.
While these top-down risk planning activities tend to be annual with updates on the quarterly basis, a bottom-up approach should also be occurring, on a far more frequent basis that deals with changing conditions in a timely manner. Identifying threats and opportunities earlier improves the odds of getting the plan, and enables the group to address the danger when the treatment cost is at its lowest.
Another part of risk management which is often neglected, simply because people don’t have suitable tools, is the level of rigor that is certainly applied to the control over a danger. The character of each and every risk should be considered and its particular potential impacts assessed. Rather than having a ‘one size fits all’ approach, anyone must be able 58dexepky introduce a danger by communicating a proper amount of information, combined with some extent of analysis and treatment that makes sense when it comes to time, mitigation resources and risk appetite.
A holistic approach to risk management starts as soon as possible, perhaps as being a ‘concern’ before meeting the organization’s standard criteria for a ‘risk’, and extends beyond the analysis and treatment to incorporate monitoring of actual outcomes, thereby fostering continuous improvement and organizational learning. By taking a stop-to-end holistic take a look at risk management, involving stakeholders over the business utilizing a single risk platform where information and data about risks can be shared, organizations develop better foresight and manage risks more proactively, which results in better operational, financial and strategic results.