The silver linings in the 2020 cloud
Is there anything about 2020 that hasn’t already been said? Well, actually, yes there is.
While there is no doubt the COVID crisis of 2020 presented us with one of the most challenging set of circumstances the collective world has faced for generations, it was also a year which created opportunities for many organisations to change their culture and their perspective on Risk Management. Those organisations have now built a platform for 2021 and beyond based upon an increased confidence in their resilience and ability to manage the adverse consequences of risks.
Perhaps, far more importantly, many organisations now go forward with the understanding and appetite to exploit risks - that is to leverage opportunities, not just treat threats. As we say at ABM Risk Partnership, from risk comes opportunity.
ABM has been helping many organisations look beyond COVID. These organisations recognised the need to make quick decisions to respond to the challenges. They proved themselves to be resilient, make sound decisions, and implement strategies to deal with changed circumstances.
Typically, the focus quickly moved from the immediacy of a COVID response, to the need to further develop their skills to understand and assess both opportunity and threat risks. After all, the risks that were there before COVID are still there. They haven’t gone away.
For ABM itself, 2020 was a year of progression, marked by the development and delivery of a series of value-adding, effective Risk Management capability and functionality for our clients.
The various activities detailed below are available to organisations looking to the future of 2021 and beyond.
Risk Management Framework - the development of a practical, modular Risk Management Framework that exceeds current best practice – adaptable for any organisation, the framework meets the needs of clients who are setting out on a Risk Management journey or have achieved a level of maturity upon which they want to build. It informs, educates, and guides the organisation, catering for different levels of Risk Management competency. The result is superior, risk-based decision making across the organisation.
Digital Risk Management Framework access– most organisations have a series of policies, processes and other documents that support their Risk Management activities. Usually in the form of PDF documents, these are far from efficient in terms of access and maintaining currency. ABM has developed a digital delivery platform to enable easy access to all elements of our holistic Framework via an organisation’s intranet. This in turn promotes a common understanding of risk terminology and methodology resulting in better business outcomes.
The Risk Management Competency Map (C-Map) – designed to identify the Risk Management competencies across an organisation, the C-Map can be based upon positions, levels, or individual roles. It recognises that there are different competencies for different Risk Management responsibilities and accountabilities across all organisations. We worked with clients to assist with the identification of job competency profiles, assessment of current competency, priority planning and then how to close the gaps, resulting in better business performance.
Risk Appetite Statements (RAS) – in many organisations, Risk Appetite is simply not understood. If a statement has been developed, it is often unworkable, and provides no practical value. ABM has developed a Risk Appetite Statement structure that aligns to the organisational objectives and values, is measurable and easily adopted and understood.
Risk Appetite Performance Tool (RAPT) – ABM has developed a monitoring and management tool to validate the effectiveness of Risk Appetite, enabling assessment of individual and grouped risks against defined appetite limits. Rollout of this new tool will help organisations move from theoretical to practical value adding analysis of risk appetite.
Opportunity Risk Management – many Risk Management consultants (and Risk Managers) talk about Risk Management as both a threat and opportunity, but for most this is no more than talk. ABM has refined the approach to simple, easily understood, and applied elements within the Risk Management Framework. Our clients benefit from enhanced clarity in enabling the prioritisation of which opportunities to pursue. They are the best testament to the effectiveness of the approach and why our mantra is “from risk comes opportunity”.
Risk Management Technology Applications – ABM has helped many of its clients establish effective Risk Management Applications, ensuring they build capability as they progress their Risk Management journey. Many organisations recognise the limitations of utilising MS Excel as their risk register, but few really understand what to look for in Risk Management technology solutions, and there are many to choose from. Inputting risks is the absolute baseline. It is how the application works afterwards that is important. Our expertise in evaluating applications ensures the business gets technology that manages threat and opportunity risks, incidents, assurance / audit, compliance, health & safety (hazards) and more. If you end up with a solution that is a store of records, rather than a management tool, you are on the wrong track.
Risk Management & Insurance – the changes in many organisation’s operations, from product manufacture and increased digital delivery to home working, will challenge the most effective insurance program. ABM has been encouraging its clients to look to their Risk Management capability as a first step in the management of insurance. Rather than simply buying insurance, effective Risk Management enables organisations to develop strategies to engage with insurers to sell risk. This has proven highly effective for many of ABM’s clients resulting in premium reductions or broader policy coverage.
Formal Training and Mentoring - ABM has developed and delivered a number of training courses as well as created tailored learning solutions. We now have basic courses (such as Risk Management Foundations), intermediate (Driving Business Efficiencies), advanced (Governance of Enterprise Risk Management) and specialist courses (Risk Quantification). The result is an engaged, skilled, and competent workforce that understands the role they each play in successfully leveraging Risk Management for better business outcomes.
Business Continuity Planning – 2020 has been a year of developing and implementing business continuity actions. ABM clients have benefited from the delivery of successful approaches to maintaining the continuity of business operations and increasing organisational resilience.
Looking forward, what do we see as success factors in 2021 and beyond?
The missing piece for many organisations is defining what it actually means to be competent, which is, of course, more than just being trained. Competency is a combination of knowledge, skills, experience and attitudes or behaviours. Ensuring competency is vital when it comes to the risk function and risk context. Enlightened organisations are recognising that building a Risk Management Framework and deploying/sustaining it are two entirely different projects. It is vital to ensure Risk Management becomes an embedded, effective part of how business is done on a day-to-day basis.
For a cost-effective balance of expertise and resources, ABM has developed a Co-Sourced Risk Management model to deliver risk capabilities along with mentoring and skills transfer. This provides clients with highly qualified expertise for better decision making, and a clearer pathway to improve risk maturity.
Indeed, many of our clients have increased the scope of their engagement with us, recognising that it is ABM’s depth of business experience and business acumen that enables us to assist as Trusted Advisors, and put Risk Management into relevant, practical context.
You too can take control of your risks in 2021. If you would like to learn more about ABM’s proven capabilities and how organisations are benefiting from them, contact us for an obligation-free consultation.
At ABM Risk Partnership, we are helping organisations prove that from risk comes opportunity.