It might sound extreme, but the cost of keeping risk management and corporate strategy separate can be the success of your organisation.
All too often the senior team focus on setting the big picture strategy, with risk and compliance working at a purely operational level.
Here at Camms we have been working over the last 20 years to eradicate this disconnect, and give organisations the right tools for success.
In our recent webinar, The Journey to Success Starts with Risk & Strategy Integration, which I co-hosted alongside our guest speaker Norman Marks, he shared his views about improving business outcomes and success by bringing risk and strategy together.
One organisation, one view of success
Particularly in larger organisations or those spread across multiple sites or regions, one of the biggest challenges is simply having a vision of the one strategy and operational plan.
Camms risk and strategy solutions break down those siloes through real-time, cloud-based software. But more importantly it connects together the high-level strategy of the business with operational activity and risk management.
According to Norman Marks, a highly experienced risk expert and author, breaking down barriers between teams is important, especially given the prevailing sentiment towards the risk department.
“Too often the risk team is seen as the department of no. The department that quite literally stops people from doing what they want to do and diverts them from what they see as running the business,” said Norman.
He says it would be similar to someone presenting you with a list of potential issues when you left your house to go to work or shopping – all it would do is annoy you.
“We all know that life is risky, so if we wanted to avoid all risks in life, we’d never leave the house. Likewise in business, if we avoided all risks, we’d have to close the business down,” Norman said.
“The risk managers who simply create a long list of possible risks are both doing themselves and their organisations a disservice, and it’s time to set aside this old way of managing risk.”
The value of sound strategy and management
There hasn’t been a year like 2020 or the start of 2021 for bringing risk right to the forefront of all our thinking. But it’s also reiterated that good management decisions are based on knowing your game plan, the right data on risks, and the agility to weigh up all the factors and move on.
The power of a software solution like Camms is that it not only gives complete oversight to all actions at a senior level, by its nature it changes the way people work and how business performance is measured and monitored.
According to Norman, leaders and Boards need to see the value of risk management and how it adds value to the overarching performance.
He cites a NC State University 2020 State of Risk Oversight report, created in partnership with the AICPA, that asked executives and Board members if they saw risk management as vitally important as setting strategy.
“The results found only 3% said absolutely yes, which is a really low result and shows they are not seeing the value of risk being part of the setting of strategy.”
Solutions that bring the risk elements into the strategic decisions that need to be made very quickly show the value they can generate, both in opportunity and in avoiding costly issues.
A more mature approach for 2021
At its very heart, good risk management, according to Norman, is all about what might happen. That means a mature outlook that explores the “good” opportunities along with the “bad” threats, with an understanding that many decisions will deliver both.
“The key question to always ask is – what is the right thing to do for the business?” Norman said.
“The risk management team has a great range of tools and ways to model risks and opportunities and project the outcomes of different scenarios.
“My proposition is that the term risk itself is unhelpful in bringing risk and strategy together. I know one organisation that changed their risk team to decision support. I also like to think of risk as the department of how. It completely reframes the kind of support the business needs and the kind of intelligence that can be delivered.” A view passionately shared by myself and the team at Camms.
With integrated solutions in risk, strategy, projects and people, it’s not about being adverse to all risk, it’s about focusing on how that risk can blossom into opportunity, which will not only serve your business through turbulent times but it will ensure Camms business software is all about making the right decisions, managing risk, aligning talents and focusing on what matters. It sets the right foundations for success.
Find out more about how Camms’ software can help your organisation bridge the gap between risk and strategy by requesting a demo today!