Lloyd Emerson Johnson — 5 Ways Risk Management Leaders Can Move Their Organizations Forward
In a rapidly changing business landscape, risk management plays a pivotal role in safeguarding organizations from potential threats and steering them towards success. In an insightful article published by Forbes titled, “5 Ways Risk Management Leaders Can Move Their Organizations Forward”esteemed author Joe Woods explores the significance of risk management leadership and presents five effective strategies that can propel organizations forward. Whether you are a risk management professional, a business leader, or an aspiring entrepreneur, this article provides valuable insights into navigating uncertainties and driving organizational growth.
The article highlights the importance of risk management in today’s dynamic business environment. It underscores the fact that organizations face a multitude of risks, including financial, operational, reputational, and strategic, which can impact their bottom line and long-term sustainability. By proactively managing these risks, leaders can protect their organizations from potential setbacks, capitalize on emerging opportunities, and foster a culture of resilience.
The author presents five key strategies for risk management leaders to move their organizations forward. These have been mentioned below -
- Adjust Your Risk Equations
Holistic risk assessments go beyond traditional approaches by considering threats, vulnerabilities, probability, consequences, and relevance. By incorporating these factors into risk management strategies, organizations can gain a more comprehensive understanding of potential risks and make informed decisions to mitigate them effectively.
2. Prioritize Good Data
To ensure long-term success, it is vital to regularly update policies, invest in new systems as needed, and question the accuracy of legacy datasets. Your assessment should rely solely on the information contained in the record, making it essential to keep policies up to date and invest in new systems when required.
“Risk assessments are only as good as the data that feeds the model.”
3. Lean on Internal and External Data
The expertise of internal teams is important for accurate profiles, but industry knowledge gained from external experts is also crucial. Relying solely on internal knowledge may be biased and subjective due to proximity to operations and past experiences. External perspectives can serve as a reminder that avoiding risks today does not guarantee the same in the future.
4. Be open to feedback
“Another barrier to successful risk management is the human instinct to fall back on familiarity and defend the way things have been done”
To achieve successful holistic risk assessments, it is crucial for all individuals involved to be committed to mitigating risks, even if it requires acknowledging that current practices may not be optimal. By fostering open communication between teams, fresh insights can be gained regarding familiar scenarios, leading to the identification of previously unnoticed hazards.
5. Follow Through
There is a misconception that the assessment process is the end of the work. While there may be valid reasons to not follow a particular recommendation, leaders should not default to opting out when pursuing comprehensive risk management. Assessments assist in evaluating risks and their consequences, enabling leaders to make better-informed decisions.
Read the full article here.
About Lloyd: Lloyd Emerson Johnson is a results-oriented strategic advisor. With over 40 years of international, broad-based experience, Lloyd considers various disciplines in his approach to management and board governance. Through effectively evaluating all corners of a business, Lloyd Johnson has reinvented the roles of a strategic partner and stakeholder champion. He is a creative visionary who transforms businesses to be effective throughout all of their operations and finances. The pragmatic leader specializes in risk management and ensuring that businesses are prepared for uncertain circumstances.
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