climbing over ERM hurdles
You got all the intent, ambition and ERM-skills lined up in your company: and still you are struggling to get much further than the first few hundred meters of the proverbial ERM-marathon?
If that sounds familiar to your mental ears, then read on. In this post, I guide you over some of the well-known ERM-mountains to make your ERM-voyage more effective and efficient.
Over the past years I came across a number of perceptions about ERM. As the word implies, perceptions are an individual’s or a group’s impressions, thoughts, preference and views. Hence, it is important that ERM practitioners are aware of these perceptions and deal with them empathetically and professionally.
A random sample of perceptions:
(if you prefer a broader source of information, just google “useless enterprise risk management” and you will not be surprised)
- risk management is about managing downside – where is the link to strategy?
- a purely internal activity
- cost only
- does not generate sales
- only the regulator and/or stock exchange care
- red/amber/green plots do not really say anything meaningful
- it’s all about filling up spreadsheets for the drawer
- another exercise to feed off probabilistic black boxes
etc etc etc … you get the point
Regardless how much real and/or perceived truth lies in these statements, perceptions amongst stakeholders do exist and we must deal with them early, best in an anticipatory manner. As practitioners we have both the opportunity and the mandate to deal with these views professionally.
how to manage?
- firstly, transparency and clarity about the expected tangible benefits of good ERM are key
- secondly, be cognizant that different stakeholders have different expectations towards the outcome and manage these expectations
- thirdly, the output of our work needs to match generally accepted quality standards
- furthermore, customize presentation of results to meet different stakeholder’s interest, knowledge, and commitment to ERM
- and last but not least, communicate the results of the ERM-related work to show the link of risk management to strategy, business plans and performance.
I hope you find my ponderings useful for your day-to-day work. The specialists within Megrow’s network possess a wide variety of skills to successfully and efficiently navigate ERM hurdles. You can contact us via the buttons below.