Supporting Success with Risk Management
Risk Management is often seen as the Business Prevention Department and the Chief Risk Officer as the Wizard of NO.
But in some ways that can be seen as a glass half full, half empty sort of thing.
A major and sometimes neglected aspect of risk management relates to dealing with the planning for and execution of major changes. We call this CHANGE RISK MANAGEMENT.
If we think of the Control Cycle as the major manifestation of risk management, Change Risk Management is the special process that is followed to make sure that important new things get on to the Control Cycle without stumbling.
Many times, these changes are the future of the company. They are the new products, new distribution systems, new territories and acquisitions that will change the course of the company’s path forward.
The Change Risk management process can be performed as Business Prevention or it can be a support to the success of the company. A good Change Risk Management process will help to identify the ways that the new activity might fail or might harm the firm. If the Change Risk Management process is designed properly, the Risk Management inputs of that sort can be brought into the process in plenty of time to correct the problems that cause the concerns. In that sense, fixing those problems adds to the potential success of the company.
But if Risk Management is brought very late to the process, many people have become invested in the change as it is currently planned and any input from risk management that something might go wrong is seen as an attempt to scuttle the project.
So timing and attitude are the two things that make the Change Risk Management process something that supports the success of the company.