Chaos and volatility are here to stay. Speed and velocity, tied to a complexity and interconnectivity of actions, decisions and inventions, will only make things even more opaque.
Short term the conflict between the CEO´s directive to generate growth and profits and the stakeholder who wants longer terms sustainability will create stress. Longer term? Are we sure where we are going?
What is my company purpose? What is my vision and how does the strategy fit into this overall objective?
Risk management will need to change. We will need to help direct directors whose role will, and should be, to direct and advice on the longer-term vision of where the world is going and support stakeholder value. But also, to help the management teams to blend these longer terms values with the shorter-term strategy. Its only through this blending of visions, that companies can survive in the future. By being dynamic, agile etc. These will become the KPI´s of risk management with severity and frequency being relegated to the lower dimensions of risk.
Two main issues exist though.
- We all have different views of what risk management is therefore the starting point and finishing point will, today, be different for all of us
- The future being envisaged by all of us is silo based. Driven by the poorly chosen statement that we are helping each CEO achieve the company’s strategic goals,
With the changes of public opinion and the current trend of technology etc what would the role of the risk manager be if we changed this to “ the strategic goals of civilisation! ”
A vision of the future
Before we can start to take decisions a clear understanding of the situation needs to be had. Different perspectives, all of them right, make this challenging. So regardless of whether I am starting with risk management or trying to improve it there will be some common milestones and steps that need to be taken or confirmed.
We all see things differently. How can I make sure we are all talking about the same thing and in the same context?
Using this perspective approach we can see that reporting of information should not be done before the other perspectives have been reviewed. Highlighting the fact that reporting is a consequence of decision making rather than being the driver and reason why you should do it..