Icebergs in the desert
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Transcript of Icebergs in the desert
Phil Griff i ths
Icebergs in the desert
Housekeeping• Slides will be available on our SlideShare page; the link will be
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The iceberg effect The turmoil in the world seems to continue
Increasing public unrest Wildly f luctuating oil prices. Natural disasters of a scale thought
unimaginable. Volati le stock markets
Probably less than 10% of the reasons for these issues are well understood, just l ike an iceberg, where 90% is below the surface
The iceberg effect
In this t ime of global change how do you steer a course through these icebergs in the desert regions?
The answer is to recognise the only real l ink between all these events – RISK – and then to try to anticipate, manage and then exploit such risks.
Think of r isk as driving a car
The car analogy
We should not speed but we do
We should always wear seatbelts in the back – but do we?
The car analogy
When did you last get your tyre pressures checked?
Some icebergs here?
Actions to take regarding key risks
Analyse the major surprises and near misses that you have had in the last 12 months
Invite all your key stakeholders to a risk workshop
Actions to take regarding key risks
Prepare media statements in advance to cover all possible crises
Offer special incentives for the best ideas to reduce risk or exploit opportunit ies
Actions to take re key risks
Communicate your att itude to risk and your required risk culture to managers and stakeholders
Do not wait unti l you are required to provide evidence of effective risk management by regulators or legislation – this wil l usually be too late
Ensure that you under promise and over perform – not the other way round
Risk Evaluation
Use only one risk matrix for the business – do not allow functions to develop their own
Risk treatment
Do not commit t ime and money in risk mitigation unless a monetary or other significant benefit can be demonstrated
Risk measurement
Set meaningful Key risk indicators (KRI’s) to warn you before risks materialise
Ensure that a graphical or tabular record of key risks for the Board
Risk measurement
Measure risks at 3 levels Inherent Residual Goal (or risk
tolerance)
The cost of poor risk management
Calculate the value of income required to cover money wasted due to poor risk management
Use this multipl ier as a business driver.
Risk ownership
Do not give too many risks to the same manager
If managers want to get a proposal through, they wil l tend to understate the risk (do not let them)
Decision making
Give executives a clear brief regarding the decisions that may or not be made by them before they attend each meeting with external bodies
JV’s and partnerships
Do not assume that because a partnership or JV is effective in year one it wil l necessarily be the same in year 2 and beyond
Project risks
How many projects do you know that have been delivered to time, to budget, and fully met the organisation needs?
Identify the risks in a project at the earl iest stage
You wil l almost certainly have to compromise on one of the 3
Decide at the start which you are wil l ing to compromise first
Major contracts
Hold risk workshops with the shortl isted suppliers or contractors before awarding a contract
Environmental risks
Ensure environmental risk is taken seriously
Cost savings are often untapped
The wider community
Identify 3 new ways to benefit the least able section of the wider community you serve
Energising your staff to manage risk
Risk awareness for staff
Induction programme
Staff meetings Newsletter Link to
performance Open opportunity
to contribute
Get your Assurance teams involved
Coordination
Ensure your assurance providers roles are coordinated to avoid duplication of effort
Business continuity planning
Ensure that your Business Continuity plan covers all eventualit ies and ensure it is fully tested
Questions and comments