(Risk Management cont.3)

Integrating Risk Management into Strategic Planning

- risks that impact the development of your strategic plan (can come from internal and/or external environments; will impact your choice of goals and objectives, eg new legislation)

- risks to the implementation of your strategic plan (can prevent you achieving your goals and objectives, eg they may require a set of skills that is lacking in your organisation)

- risks generated from implementing your strategic plan (unintended consequences of implementing your strategic plan, eg new technologies like cloud computing may increase the organisation vulnerability to security breaches)

Aligning risk management with your strategic plan

- address risks that are impacted by external legislation, regulatory or budget support
- use the strategic planning process to produce critical inputs for risk management
- create resilient strategies to handle potential risk exposures
- get the balance right between allocation of resources with publicly visible risks and mission-critical operational risks
- monitor external indicators that provide early warnings and trigger pre-emptive actions
(main source: Camms, 2023)

Key steps to include risk perspectives in your strategic planning

i) define business strategy and objectives (must be specific and measurable; broken down into smaller tasks and projects with key deliverables)
ii) established key performance indicators (KPIs) (using historical and reactive indicators to determine past performance)
iii) identify risks that will impact on performance (includes establishing key risk indicators (KRIs) and tolerance levels; these indicators are forward-looking and proactive; used to anticipate risk events that may occur)
iv) provide integrated monitoring and evaluating, and reporting (continuously monitor KPIs and KRIs to mitigate risk or leverage unexpected opportunities when they arise)
NB The importance of connectivity between different departments so that data is readily available to all stakeholders, ie use of software that automates the date of valuation process, ie scorecards, graphs, dashboards, reports to monitor performance against targets, benchmarks, deadlines, risk assessment can plates, budgets, key milestones, etc.
"...enables them to align goals, outcomes, strategies, actions, and cast to every level of the organisation with configurable planning frameworks, templates, and hierarchies. this comprehensive oversight allows organisations to make linkages between different data sets, view the impact of a strategic risk on different business units, and met every scenario that could impact the overall strategy..."
Camms, 2023

Summary
"...Effective strategic risk management to cultivate awareness of these risk across your business and any potential opportunities......this should be underpinned by technology continuously gathers, scans and analyses vast amounts of data; and performs within the framework that identifies what to seek, where to look, and how to monitor developments..."
Camms, 2023

All this will help in laying the foundation for informed decision-making around risk.
Need to go beyond just focusing on every day operational time risks to strategic risks; need to include risk management into strategic planning.
Handling risks involves turning them into opportunities, or mitigating and/or avoiding the impact
Need to get a balance between too much and too little risk analysis. Too much risk analysis results in 'paralysis by analysis' and will encourage a fear of risk taking; while too little risk analysis could result in taking unnecessary risks.

Need to be proactive, collaborative and flexible in identifying and handling risk management.
"...strategic management tools that link to risk management programs will automate this alignment by breaking down strategic goals and objectives into a series of programs, projects, tarts, and actions and allocating them across the business. This palatable approach ensures your entire business is accountable for achieving strategic goals set by senior executives and board, with employees and teams benefiting from full visibility of their role in achieving the strategy. Each project, task and action should be allocated an owner, timelines, dates, and key actions. When users input into the strategic tool, they can automatically add any associated risk which feeds into the risk register and risk reporting for a joined-up approach..."
Camms, 2023
Use appropriate software and platforms to automate data collection and analysis around risk management; encourage sharing of data collection and analysis plus report consolidation.