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Managing risks - it's an intuitively good idea. But formal Enterprise Risk Management (ERM) has never had much success in transforming real world organizations. There was obviously a flaw, somewhere, in the way that ERM was being portrayed. It didn't take long to identify the fundamental weak point. Experts and consultants were portraying ERM as something that must be formalized. ERM required that organizations fundamentally change the way they do things. It became a strategic goal unto itself. That didn't ring true. Organization manage risk every day - and most do it pretty well. They didn't need something totally new and fundamentally different. 

Once you invest time thinking about it, it becomes clear that risk management exists within the broader context of strategy development and strategy execution. In that context there is a clear and intuitive role. The ability to understand the risks (and actively manage those risks) within a particular strategy provides a far greater chance to deliver the results that you want. In this context, risk management provides real value.

Once we transitioned from "risk management as a goal unto itself" to "risk management helps build better strategies", a more accurate view of risk management took shape. We developed a practical, comprehensive and intuitively correct way of thinking about risk. We designed our approach so that it could be taught to the organization's entire management team - providing better strategies up and down the organization. 

We then realized that the same processes, structure, and rigor could be applied more broadly to the entire performance environment. This creates a consistency of management practices, not limited solely to strategy development and execution. This comprehensive approach explains, for example, how risk impacts goal setting, strategy development, establishing performance metrics, documenting strategic assumptions, and (perhaps most important) how to identify -  in advance - which strategies are at risk of failing to deliver anticipated results. When these at-risk strategies are identified early, there is often time to make adjustments and still deliver the necessary results that might otherwise have been lost. The entire team, from top to bottom and in every activity, executes better.

We designed our entire approach around improving the ability to accomplish goals - whatever those may be. Not just the top goal (the mission) but any goal. This created great flexibility because it allows the process to be introduced anywhere in the organization. You don't need to start at the top and work your way down. Our approach is consistent and useful no matter where it is applied.

To evoke a broad image of the benefits, we chose the phrase "Opportunity Management" - because every organization has its own unique set of opportunities. This is true whether the organization is a Fortune-500 corporation, a not-for-profit, or a baseball team. When any organization excels at realizing its opportunities, it wins. 

 

 

 

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