The World at Large needs Visionary Leaders who have the ability to anticipate the future and have a clear understanding that the future is shaped by what we do today to optimise and / or exploit Threats and Opportunities lying ahead.
A Risk Intelligent and Informed Leader is someone or anyone, who is in charge of making a business or a country prosper and achieve its Vision. This could be a CEO, President, Sales Director, CFO, Chief Risk Officer, COO, Engineer, Doctor, Economist, Director General, Minister, Mayor, City Manager, Receptionist or even administration staff. Regardless of what your title is, you are a Risk Management Leader and have a unique challenge ahead of you to anticipate and shape our Future. As a Risk Intelligent and Informed Leader you have to be different and go against the grain to avoid blending into the crowd. Don’t fall into the trap of confusing Crisis Management with Risk Management.
If you have ever looked up the word ‘Education’ in the dictionary, you may have found that besides Enlightenment, it can also mean Indoctrination. A Classic Example of Indoctrination are those that say a Risk Intelligent and Informed Leader is a Person with the Tittle Chief Risk Officer / Adviser, Head of Risk, Risk Officer, Risk Champion or whatever the Risk Tittle may be.
Indoctrination is a system that often keeps us shackled to the past — living by the rules of past generations that have no effect on what we want our future to look like. Often, Indoctrination suppresses our creativity and ingenuity as human beings. “Risk Management is a Culture, Not a Cult. It only works if Everyone lives it, not if it’s practiced by a Few High Priests” Tom Wilson
Where Are We Now Analysis: Before Envisioning The Future of Your Business or Organisation Understand Your Strategic Baseline and Risk Maturity Levels. Use the following tools to understand your current Position or Situation in relation to where you want to be. (Tools – PESTLE Analysis, SWOT Analysis and Porter’s Five) At a minimum PESTLE and SWOT Analysis will give you insights into the current business conditions that may in the future be a Source of Risks.
Where Could We Go – Option / Scenario Formulation: As this stage you formulate options and weigh options available to you and your Decision you take should be informed by Strategic Risks you have Identified. Unlike Operational Risks there is no hard and fast rule on how to Identify and Assess Strategic Risk Scenarios, however an in-depth understanding of the current environment such as PESTLE Analysis, SWOT Analysis and PORTER’s Five Forces will equip you with information on variables that can evolve to become Threats or Opportunities in the next 3 to 5 Years or more.
At this Stage when you formulate your Vision it should be informed by Global, Regional, Country and Industry Risks as these may be a Source of Opportunities to Exploit in the Medium and Long Term. These Risks should also inform the Strategic Objectives you formulate. (e.g. Setting up New Operations in a Country as it’s Strategic Intent it want’s to be a leader in 4IR Technologies and will be introducing Tax Incentives For Tech Companies). You should also an understanding of the resources required to optimise downside risks and/or to exploit opportunities identified this should inform your decision as to where Do You Want To go.
Where Do We Want To Go – Option Selection: Here you firm up your Vision and Decide what your Focus Areas and related Strategic Objectives will be, to achieve your Vision. You need to have clarity on the Risk Scenarios associated with the Vision you have set yourself and the related Strategic Objectives. An In-depth understanding of Strategic Risk Scenarios will assist you to set SMART Strategic Objectives. (e.g. Understanding a Risk Scenario that relates to a prolonged Economic Stagnation due to the COVID Scars taking too long to heal, will certainly inform what Strategic Objectives you set for your FinTech Start-up)
What Will Help us Get There – Mobilise Support and Resources: When you decide what Financial (Budget) and Non – Financial Resources are needed to successfully execute your plans include Risk Optimisation and Exploitation Action Plans. Risk Optimisation and Exploitation Plans should be an Integral Part of your Strategy Blue Print and Operational Plans. There is no need for separate Risk Registers that are monitored separately in a Committee called a Risk Committee. When you Communicate and Cascade your Strategy, include Significant Risks, Risk Optimisation and Exploitation Plans as an Integral Aspect of your Strategic Plan or Operational Plan.
What Do We Do Now – Implementation: Risk Management KPIs should be set as an Integral Part of your Organisation’s Annual Performance Plans. As you monitor the implementation of your Strategy and taking corrective action where required include Risk Optimisation and Exploitation Plans. Review and Reporting on the effectiveness of your Risk Management Initiatives should be done as an Integral Part Strategy and Operational Performance Reports. There is no need to develop separate parallel Risk Management Procceses that do not add value in managing the business.