Unlocking hidden potential and reducing impact of risk

We are constantly faced with the challenge of managing the impact of risk on our organisations. Risk management must start at the board level and involve a mindset of innovation to extract strategic advantage. Senior executives must focus on major, endemic risks and work to control and mitigate them. Staff will follow suit with the right mindset in place. One of the most straightforward actions we can undertake immediately is to thoroughly examine our risk management process and plans. 

Identifying key risks and their impact

Being prepared is central to managing risk and its impact. This means taking the time to ascertain different scenarios before they potentially occur. 

Take these three steps:

1. Begin by identifying the top three or four risks your organisation faces. Determine those with the greatest possibility of occurrence, a significant impact if they did eventuate, and those with little or no controls around them), and then examine each one.
2. To minimise the potential occurrence of these risks, explore the measures already in place. Ask yourself: What steps are we taking to mitigate the likelihood of these risks materialising? Consider this as an opportunity to not just protect our organisations but also to leverage strategic and competitive advantages. Are there ways to optimise our existing efforts? Can we unlock exponential growth by capitalising on these initiatives? Engage your innovative mindset and explore potential spin-offs into new programs or revenue streams.
3. In parallel, shift your focus to the second component: preparing for the impact if these risks materialise. Evaluate the controls and safeguards your organisation has in place to manage and mitigate the impact. Consider the strengths of each existing control measure and ponder ways to amplify their effectiveness. How can we transform these risk management measures into sources of strategic advantage in other areas?

Take advantage of tools available to assist with this process, such as a risk register template and a risk management policy template.

By reframing the discussion around risk management in this manner, we open up possibilities for strategic growth and innovation. We are no longer simply guarding against potential threats; we are actively seeking to gain an edge in the market. This approach fosters a proactive culture that encourages continuous improvement and transformation. Rather than being constrained by risk, we view it as a catalyst for progress.

Through the lens of strategic advantage, we can identify novel ways to harness our resources, capabilities, and expertise. By embracing this perspective, we instil a forward-thinking mindset within our organisations. We demonstrate our commitment to seizing opportunities, even in the face of uncertainty. This shift in mindset empowers our teams to think creatively and fosters a culture of resilience and adaptability.