How to focus on what really matters for Risk Management
– by Dannya Hu
I was recently reading Managing the Risks of Organizational Accidents by James Reason. It quoted the Group Treasurer of Barings bank who acknowledged ‘There was always something else that seemed more pressing’ when commenting on why fraud control deficiencies were not effectively addressed.
So how do we avoid the trap of always prioritising the crisis of the moment above longer-term risk reduction activities?
Prioritising the crisis makes sense when there is a literally burning platform. However, what happens if it is a media crisis? Or board meeting? Or an important client making demands? Should that always get prioritised over longer-term improvements?
It’s clear the answer should be no, but reality isn’t that simple.
Every day we make a thousand small decisions about prioritisation. I need to deal with this urgent request before I get onto making those process improvements. I need to watch the latest Doctor Who; cleaning the air-conditioning filter can wait until next week. These are often made based on criteria we’re not consciously aware of.
One of the criteria we all use is immediate impact versus longer-term impact. If I don’t deal with the guy on the phone right now, he’ll probably be really annoyed. Whereas, nobody’s chased me down yet for those process document edits. The air conditioning filter can wait another week, whereas Doctor Who clearly can’t.
Of course, this assumes that we always know what to prioritise. Most of us will use a risk matrix to prioritise risks, but do we put the same effort to prioritising our control improvements and treatments? Do we know which controls are the most critical to mitigating the risk?
Our new course on Managing Critical Controls, in partnership with the Risk Management Institute of Australasia (RMIA), may be able to help you with focusing on what really matters for risk management.
The course will help you:
- understand which controls are the most critical for your risks
- verify the effectiveness of critical controls
- provide you with tools to visually represent your risks and controls for decision-makers
- improve engagement with decision-makers on risk management.
Overall, the course can help you better prioritise your risk improvement actions, which can help you know when to prioritise the crisis of the day and when to prioritise the longer-term improvements.