The Hazards of Implementing ERM without a Plan

I cannot tell you how many times someone has asked me questions about random parts of an ERM program. The discussions range from basic concepts all the way to advanced topics.

What is prompting the jumping between topics? It is typically these two things:

  1. Someone looked up ERM and saw some aspects, which looked really helpful.
  2. Executives want to see progress and fast!

But let’s back up for just a minute.

There are multitudes of ways for how an organization comes to have ERM. Some companies are prompted by their regulator. Others have executives who learn about ERM (whether from their own research or from a previous position) and feel it would be beneficial for their current organization. And still others have board members who recommend ERM as a best business practice.

Regardless of how the organization comes to the (really good!) decision to have ERM, a lot of times the executives want to see progress made very quickly. So they do some research online, see some random pieces that look great, and tell their peers about it.

The scary part is that there is no deliberate plan for how the organization will actually be able to do those things. Because unlike magic, you do not go from nothing to a grown ability in a few days or weeks.

It takes time. And persistence.

So when you start hearing these types of comments and expectations from leadership, focus on managing those expectations and develop a plan for how to achieve what they want to see.

If you try to get from A to B without a plan, the chances that you will fail increase dramatically.

And I want to see you succeed and make progress!

There are certain elements of ERM that make sense for some organizations, and yet, do not make sense for others. Be thoughtful and deliberate when making your plans.

Think about the usual timeframe for accomplishing tasks in your organization.

  • Does it normally take a week to get a meeting together?
  • How long for a document to be reviewed for feedback or approval?
  • How often to executives get together?
  • How frequently are they willing to have a focused discussion on ERM?

Take those usual timeframes and add about 20% on it. Because with something new, there will be additional lag time to get initial conversations going, work around people’s vacation and meeting calendar, and show that progress.

Don’t expect to jump into the more difficult aspects of ERM until you have the basics figured out. Develop your governance, plan out the risk identification process, test out the risk assessment method, determine how you will analyze the risks to get the end result for communicating to the audience.

Do these things before you start thinking about integrating with project management or adding key risk indicators. Otherwise, you are asking for confusion and delay as part of your implementation.

Did you start implementing ERM with a plan? Or are you scrambling to keep up with management’s expectations?

I’m interested to hear your thoughts on this topic. Leave a comment below or join the conversation on LinkedIn.

And if your leadership continues to want you to leapfrog from A to X without a plan, please don’t hesitate to contact me today to discuss your situation.

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