How can we roll out Enterprise Risk Management with a minimal footprint? The answer is to use a principles-based approach. Once High Quality Risk Assessment is grasped, we can turn to an implementation that meets crucial criteria efficiently.
What is ERM in relation to your entire management practise?
1. value proposition and cost-benefit analysis - principle: demonstrable worth, self-proven
2. execution plan and time line - principle: organic growth
3. working methods:
- High Quality Risk Assessment - principle: rigour of definitions and procedure
- Enterprise risk aggregation - principle: integrated w planning, management
4. policy, standard and governance - principle: administrative minimalism; clear roles
5. benefits - principle: direct effects vs higher order benefits and eventual outcomes
Please see my book if you want to investigate the following elements of the ERM implementation:
- a communications plan;
- performance and success criteria;
- integrating Business Continuity and Emergency Planning, and other risk management sub-disciplines;
- capability maturity model to assess the level of development of your ERM regime.
How do we maintain a minimal footprint in the implementation?
1. practitioners prove to themselves the value of risk ID in early stages at trial sessions;
2. the roll-out is incremental, not command and control; organic growth prevents wasted investment;
3. working methods are already effective thanks to the using rigour in definitions and process in risk ID;
4. formal elements of the program are not overblown; they are minimal and have a specific utililty;
5. benefits are of two kinds: the immediate, observable ones reported by practitioners which can justify continued roll-out, vs. the long term and eventual outcomes that become measurable over time.
We will continue the discussion always keeping to a principles-based approach. This allows you to consider the principle in question and apply it in your own way, following the requirements of your own particular organizational culture and business.
The next episode will review in a more complete and systematic way the principles of successful ERM implementation.
“Program managers of new initiatives are under pressure to show results, and it is easy (but risky) to communicate promises rather than demonstrate the work. Focus on a low-key approach that relies on evidence of benefits.” (Solving the ERM Puzzle... p.75)
(E. Robertson 2016) Solving the Enterprise Risk Management Puzzle: Secrets to Successful Implementation
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