Seven (7) Principles in Integrating Risk Into Decision Making, Strategic Planning and Execution Lessons
Based on a 100 Year Strategic Management Literature Review and my Experience in Managing Risks over the past 20 Years here are some basic logical lessons in enhancing an Organisation’s Decision Making and Strategic Planning Capabilities;
1. Make Risk Analysis an Integral Part of Decision Making, Strategic Planning, Execution and an Organisation’s Culture. It is not a Stand Alone Activity but an Integral Part of Decision Making and Planning
2. Integrate Risk Analysis to your Existing Industry or Company Specific Decision Making, Strategic Planning and Operational Planning Processes
3. Managing Risks is not a Compliance or ISO 31 000 driven Requirement but a Business Imperative that has existed for over Centuries as part of Human Decision Making and Strategic Planning Procceses and it has always been part of Strategic Assumptions or Business Assumptions made that Influence Strategic Planning
4. Your Organisation Performance Leading and Lagging KPIs should include Risk Focused KPIs
5. Link how well you managing Risks to Insurance Buying Decisions and ensure good Risk Mitigation and Optimisation Outcomes are reflected on Insurance Premiums Reduction and Insurable losses are part of your Performance KPIs
6. Last but not least don’t fall into the trap of Confusing SWOT Analysis, PESTLE Analysis with Risk Analysis. Always bear in mind that Risks are Future Uncertain Anticipated Significant Threats and Opportunities that have not materialized yet but should they materialise will have a positive or negative impact on the achievement of an Organisation’s Objectives
(7). The Success of the Above is dependent on Upskilling (Training) Your Employees (Team) in Integrated Risk Management
Below is an illustrative example of how can integrate Risk into your Existing Decision Making and Strategic Management Processes without creating Stand Alone, Non Value Adding and Expensive Tick Box Risk Management Structures.
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