Successful organizations always operate with risk management in their sights, since their chief purpose in business is to achieve their objectives. How often do they refer to their risks as they make decisions on their plans? Sadly, the evidence indicates that it’s not as often as they should. Here are three guidelines that help you to align your decisions to your plans and to your risks in a way that creates continuity and substance to achieving objectives:
The decision that follows may impact the plan and its progress toward achieving the target objective. It is the continuity of this activity that is most often inconsistent, concluding with results that are less than optimal. This point is not about whether a system is in place or not, it is whether there is consistent and reliable use of the decision-making process when risks impact the plan.
Decisions and strategic plans are inextricably inter-twined and co-dependent. The impact on new information is not only reflected on the numbers, but may also impact services, products, customer experience and third parties. All these elements must be balanced with new risk information and embedded into the decision-making process.
What is often overlooked at this step is the ability to recognize patterns. The patterns that occur in organizations are what many recognize as the ‘intuitive’ aspect of decision making. They just know that something is right or wrong with how the information is being used. The combination of information, risk and decision is what will ultimately be the success factors in executing strategy.
By not thinking of risk as a threat it changes the dynamic of decision making. Risk based decisions focus on the degree of uncertainty of an outcome, based on given assumptions, capabilities and degree of control. By making the decision traceable to the identified risk it makes accountability and consistency much more reliable.
The approach to risk-based decision making captured here is but a high-level snapshot to how more than 350 of our organizations are leveraging this system for better strategic planning, risk management and problem solving. We invite you to explore options that add value to organizational processes and performance management.