What is RISK management competency & maturity?
Below are my notes from the Risk Management training module, which I conduct for managers. I hope this will add value to your leadership style.
Risk management is the thing that makes the difference between success and failure. Because we all plan to succeed and then we don’t. And the reason that we always don’t succeed because things happen that we didn’t plan for or we didn’t expect and those things if happen to see and prepare ourselves and position ourselves better for them we might have had a better chance to be more successful. And the things, which we couldn’t see, planned or forecast are the RISKS.
What are the components of risk management competence in an organization (not in an individual employee)?
Below are the four key factors and components of risk management competence.
1. Culture: How we work, how we believe about risk, how we position ourselves, what is the concept of risk?
2. Process: It is an essential part. How do we handle risks? How do we act towards risks?
3. Experience: The whole people’s side of competence. Do we have the right people with the right skills and the right attitude in the right roles? Are they learning, are they developing?
4. Application: We do actually have to do this. And a lot of organizations have risk policies and risk processes and they conduct lots of training courses but those employees don’t actually do anything.
In my opinion, Culture, Process, Experience & Application are the four components of competence. And each one of those can actually exist at different levels of capability in the organization. We can have well-trained people with good processes, who don’t do risk management because they have a very weak culture. So low culture, high process, and experience have low application. And you can see the different levels of these components in different organizations.
Risk management maturity is to get the right level of each of those four attributes so that we think right about risks, we act right towards the risk, the right people doing the right things & that’s risk management maturity.
Risk management maturity starts with diagnosing your current risk management level to benchmark and know where we are and where we want to go.
To start with risk management maturity, we have to have a vision. The first step is to create an awareness that we can and must do better. The job of the leadership is to provide that vision and create an environment in the organization to inculcate the vision in the mind of all employees and motivate them to start thinking, acting, and moving forward in the same direction,