Most businesses understand the importance of managing risks and opportunities, but not all of them give this the systematic and strategic attention it deserves. The various risks that commercial enterprises face require effective strategies that offer actionable solutions to avoid or mitigate risk. Crafting a risk management plan, however, is not a straightforward endeavour, so having a few basics and the right tools helps. Here are a few simple tips for improving risk management:
Focus on objectives
A strategic risk management tool, like the one we offer at Clearview, enables managers to establish risks with a clear line of sight to strategic objectives. This link to strategy guides employees to understand why the risk management approach is necessary and identify the appropriate steps that need to be undertaken to control the uncertainty.
Reporting & transparency
If a risk management strategy is to be effective, it must have an effective reporting and monitoring system. Our risk system provides a clear overview of how well risk is being managed and identifies the gaps that need to be addressed. It certainly helps if the culture of an organisation encourages managers and employees to be transparent when it comes to identifying and reporting threats and the challenges and solutions required.
Clearly defined ownership
Every risk management policy must assign duties to specific stakeholders in an organisation. One reason risk management can fail is that there isn’t clear ownership of the risks or the controls that mitigate them. A company should assign different risks to the people who are experts in them. For example, an IT professional should handle the potential IT threats of a particular project. Our risk management software allows a manager to be clearly assigned to a risk or control and provides the framework to enable them to manage them effectively.
Identifying the threats that an organisation faces is crucial to creating an effective management plan. Risks should be classified in terms of (a) potential consequences and, (b) the likelihood of them taking place. Understanding the root causes of different risks as well as their potential consequences allows managers to provide more accurate risk assessments and focussed Control and action plans.
Respond to this year’s challenges
An effective risk management strategy determines how well a business responds to various challenges when they arise. Investing in a reliable risk management tool, like ours at Clearview, makes it easier for a company to monitor, control and mitigate threats and uncertainty. With our software, businesses can avoid common mistakes that render risk management plans ineffective.