We’re fast approaching that time of year when organizations start their strategic planning. It literally seems like yesterday we were talking about goals for 2019. Before you know it, 2020 will be here!
Risk professionals like you play a key role in ensuring executives are making the most informed decisions possible.
These decisions are among the most important executives make since they define the organization’s goals and how they will be accomplished, providing direction for all personnel and activities throughout the entire organization and beyond.
In recognition of this importance, I want to provide a few quick-glance resources from the blog to reference as you and executives begin planning for the year, or years, ahead.
The following list is not in chronological order, but rather a logical sequence of considerations for ensuring risk is embedded into strategic decision-making.
Strategic planning is the formal planning of goals by executives (i.e. market share, revenue, etc.) while annual planning focuses more on how the goals set by the company’s leadership will be met. Learn ways ERM can be engaged during both of these processes to ensure the organization is taking the right amount of risk.
Scenario planning is a key part of strategic planning as it helps executives visualize how a certain course of action may play out. It is a tool for recognizing and reacting to (or planning for) change before its negative effects appear. This information helps guide executives to modify plans or uncover new opportunities.
We know that scenario planning is an effective tool, when done correctly, for discovering and testing assumptions to ensure the right goals and objectives are being developed. In this post, learn some questions to consider throughout the strategic planning process (before, during, and after). With answers in hand, executives can determine if goals should be changed or not.
Lack of engagement with ERM during the strategic planning process is a common problem. In this article, I outline the main reason why executives and business units cast reports aside. Instead of getting frustrated, learn how you can make ERM into a valuable tool and not just a documentation exercise.
Focusing on loss prevention rather than success is one of the reasons why ERM fails to add value during the strategic planning process. As this article explains though, organizations need to move beyond a loss prevention/risk “management” mindset to one of optimizing performance and ensuring success.
This guest article from our friend Hans Læssøe provides a different perspective on the differences between traditional risk management (i.e. managing risks already taken) and decision-focused risk management (i.e. occurs before decisions are made). Learn similarities and differences between the two, plus a few tips on how risk professionals can start providing a risk perspective during the decision-making process.
Has your organization started its strategic planning for 2020? If so, is ERM actively engaged in the conversations?
How involved has ERM historically been involved with the strategic planning process?
I am interested in hearing how organizations tackle this important task. Please feel free to include your perspective in the comments section below or join the conversation on LinkedIn.
And if your organization is struggling to integrate risk into its strategic planning process, contact me to uncover what may be causing the issue and possible ways to address it.