How To Leverage Your Risk Management Capabilities To Drive Innovation, Creativity and Business Value…

Humankind is generally in agreement that the World in the next 20 Years will change more than it has changed in the last 400 Years. The Question is What Will Drive this change? My Observation it is Effective Strategic Management of Risks (i.e. Timely Identification and Optimisation or Exploitation of Risks). We can draw valuable lessons from Michael Bell, the Founder, Chairman and CEO of Dell Technologies, one of the World’s Largest Technology Infrastructure companies when he said “The Only Constant in Our Business is that Everything is Changing. We have to Take Advantage of Change and Not Let it Take Advantage of Us. We Have to Be Ahead of The Game”

As early as 2000s after the Collapse of Enron, Organisations such as COSO, FERMA etc created Risk Management Standards and were all generally in agreement that Risks are typically anticipated Strategic Threats and Opportunities that may materialise in the future and have either a positive or negative impact on the achievement of our Vision and/or Objectives. In 2005/06 I made the observation that Individuals and Organisations that seek to embrace change by identifying risks that will impact the achievement of their objectives and develop strategies to optimise and/or exploit risks (both threats and opportunities) identified are more like to take advantage of change than those that don’t.

Avoid Strategic Inflection Point

Those that don’t develop Strategic Risk Management Capabilities to drive Innovation and Creativity find themselves in a Strategic Inflection Point Position. “A Strategic Inflection Point is a time period where when an Organisation must respond to Disruptive Change in the Business Environment Effectively or they face Disruption, that they never anticipated or they willyfully ignored” Strategic Risk Management helps Organisations See Big Changes Ahead of Time. How Businesses Can See Big Changes Coming Ahead of Time | Fortune.COM

To prevent a Strategic Inflection Point, Risk Management should be seen as Strategic, an Integral Variable of Decision Making, Strategic Thinking and Strategic Planning that Brings The Future Into The Present So We can Prepare For It Today. Strategic Risk Management improves Decision Making and embraces uncertainty, uncertainty brings about change and progress to Humanity and it keeps us on our toes, it brings our innovetiveness and creativity into the fore.

Typically Human Beings innovate and create knew ways of doing things because they want to solve current problems that are bugging them or are reacting to opportunities that have already materialised. On the other hand there are Strategic Thinkers who anticipate the future, innovate and create solutions to take advantage of the anticipated future.

Rocking The Boat of Certainty

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While in history there are many examples of leaders who lacked Strategic Foresights, there are also Leaders whose Decisions and Actions were driven by the tremendous amount of Strategic Foresights they had to innovate and create inventions that many never imagined with ever happen.

In 1895, Lord Kelvin – Chairman of the British Academy of Science Declared “Heavier that air Flying Machines are Impossible” Clearly his thinking was influenced by the present and did not cast his eyes to the future to see endless possibilities and opportunities to solve current and tomorrow’s challenges.

In this context Risk Informed Decision Making changes Present Forwad Thinking Habits to Future Backward Thinking. Risk Foresights and Risk Informed Decision Making is that Aspect of Decision Making and Strategic Planning that Brings The Future Into The Present So we Can Prepare For it Today. It is worth noting Years later after Lord Kelvin’s unfortunate comments, Wright Brothers proved that humans could build a machine “capabable of fulfilling one of humankind’s oldest dreams of flying” It is said after the Invention of the Flying Machine, Thought Leaders of the time were certain humans “would never be able to fly faster than the speed of sound. it was a physical impossibility they thought. The plane would explode if we were stupid enough to try” Risk Management as a Value Driver teaches us to be sceptical of other people’s “Truths” and that we should embrace change.

False “Truths”

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The history of Humankind is fraught with “Truths” that have never been tested that are later proven not to be truths after all. One case in point is where it is said “Consultants hired by Hewlett-Packard reckoned that there was a market for a maximum of 5 000 calculators. HP ignored the consultants and sold 750 000 calculators in 5 years”

With Strategic Risk Foresights knowledge the HP Consultants could not have been constrained by their present reference point, but could have foreseen future possibilities (both threats and opportunities). HP being one of the companies whose Decisions were and are always informed by Strategic Risk Foresights ignored the Consultants and seized the Opportunity they anticipated to the delight of its Stakeholders.

There is a saying which goes like, when making Strategic Decisions “Forget What you Know and Keep Looking as Most Things in life have not been Done Yet” Most Innovations and Creations most of times do not have a past and present point of reference, and most innovators and creators use their hunch to anticipate future posibilities and then get things done.

Risks Are in The Future and Not In the Present

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Fredrik Haren In The Idea Book, wrote “We Imagine we know more or less how our branch works, how it will develop and which products and services will be developed in the near future. The truth is, however, that we do not know anything”

He further observed that in 1931, Lincoln Steffens wrote: “Nothing is done. Everything in the world remains to be done or done over. The greatest painting has yet to be painted, the most moving play yet to be written, the most beautiful poem yet to be recited. Nowhere in the does exists the perfect railway, or a good government or a sensible law….. And if the arrogant naive youths at our university could understand this, then maybe they would not all become specialists in football, drinking sprees and undeserved grades/university degrees. They should not be taught what is already known; they should not be encouraged to learn things that are already known – they are worthless”

What a profound observation made in 1931, by Lincolin Steffens underlining the need to draw lessons from the future and the importance of anticipating Risks (bringing the future into the present) and optimising or exploiting these risks (doing something today to prepare for the future). Effective Risk Management Practices bring clarity on what the future may look like, what opportunies lie ahead and what solutions should be innovated and created today to shape the future we all desire.

Risk Leaders Are Strategic Thinkers, Innovators and Creators

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It has been observed that, “some people seem to be programmed to find fault with new ideas, to guard the Status Quo. There is nothing wrong with this as critics and scpetics are also needed. But when there is too many such people, development risks coming to a stop”

It is said Charles Babbage was an inventor and innovator who lived in England in the 1800s. He complained about the English person’s unwillingness to change. “Propose to an English Person an principle, or any instrument, however admirable, you will observe that the whole effort of the English mind is directed to find a difficulty, a defect or an impossibility in it. If you speak to him of a machine for peeling a potato, he will pronouce it impossible, if you peel a potato with it before his eyes, he will declare it useless, because it will not slice a pineapple”

“Can It Peel Pineapples too?” Risk Management is a capability that supports a culture of open climate for ideas and it is an integral part of decision making and strategic thinking that focuses on bringing to the fore new innovative ideas to anticipate and prepare for the future. It helps individuals and Organisations to embrace new ideas, drive change. innovate and create for the future.

Risk Informed Innovation and Creativity

Effective Risk Management just like Strategy, is Strategic, is Contextual and can not be defined or led by Consultants or Individuals with a Title Risk Manager; Risk Officer or Chief Risk Officer or a Risk Committee, but is created and implemented by an Organisation’s Leadership and their Teams as an integral part of an Organisation’s Strategic and Operational Management Processes with the Chief Risk Officer being non other that the Chief Executive Officer or The President of The Company.


If You want to improve your success rate of your Innovations and Creativeness consider and Build the Value of Your Organisation, up – skill and cross – skil yourself in the art and science of optimising and exploiting risks as it will point you to the right direction where your innovations will be more impactfull nd create Organisation Value. Risk Management should be positioned and acknowledged by all levels of the Organisations as a Driver of Business Value and not a Short Term Business Performance Driver, as Risks are in the Future and not in The Present. Learn from the greatest Risk Leaders of our time such as Elon Musk Tesla Finally Made a Profit | 2021 and Jezz Bezos Amazon’s Breakeven Strategy For Kindle | 2012 on how they forego short term profits and focused on innovation and creativity to build long term Business Value. Today their companies are the the Top Ten Global Valuable Companies.


One thing common amongst Great Risk Leaders (i.e. Entreprenuers, Innovators, Creators and Strategists), is that they are Masters of understanding their Environment both the present and the anticipated future Environment, which informs what Strategic Opportunities they will Exploit and what Innovations they will drive to take advantage of the Opportunity Aspects of Risks. Organisations should make it a habit and a way of thinking to understand Global Risk Foresights, Regional Risk Foresights, Country Risk Foresights to Inform Decision Making (e.g. Business Envisioning, Setting Focus Areas, Setting Strategic Objectives, Deciding where should Innovation Initiatives Focus on, Which Strategic Projects and Initiatives to Prioritise, Capital and Resource Allocation Decisions).


A word of advise, there is very little you may possible learn from Self-Praising Risk Management Consultants about Strategic Risk Management Practices but there is a lot you can learn from Innovators and Creators with a proven Track Record who have successfully anticipated the future and effectively exploited the Opportunity Aspects of Risks. Bear in mind that every Human Being is a Risk Manager or Leader, you are the only one who possible understand where you are going than a Risk Consultant and you are the only one who understands your context and unique circumstance that the next person.

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