Volkan Can, enterprise risk manager of a global building materials company, and board member of the Enterprise Risk Management Association of Turkey, shares his tips on how risk managers can operate more effectively to improve the health of their organisations.
In the contemporary business landscape, the concept of strategic risk management mirrors the functions of our immune system.
Much like our immune system’s hidden workings within our bodies, risk management often operates behind the scenes in companies, safeguarding against threats and ensuring continuity.
Just as a weakened immune system can manifest through physical symptoms, inadequate risk management can lead to operational inefficiencies and setbacks.
Picture your company as a living, breathing organism. Just as our immune system works tirelessly behind the scenes, fending off threats and maintaining our well-being, strategic risk management operates as an invisible force, ensuring your business’s resilience and longevity.
It’s not just about defense; it’s about unleashing your company’s potential and carving a path to greatness.
Strategic risk management goes beyond protection; it fosters resilience and optimisation, akin to a marathon athlete’s pursuit of not just avoiding injuries but also enhancing performance.
A company that prioritises risk management cultivates innovation, efficiency, and growth by proactively identifying opportunities and addressing challenges.
”It’s about unleashing your company’s potential and carving a path to greatness.”
The parallels are clear: just as our immune system thrives on a balanced diet, risk management relies on accurate data. This data-driven approach enables companies to spot emerging risks and allocate resources for mitigation.
Both systems adapt to new threats and changes – our immune system evolves to counter diseases, while risk management strategies adjust to new business risks.
Furthermore, both systems don’t prevent setbacks entirely, but they enhance recovery. Effective risk management equips a company to respond adeptly to challenges, minimising damage and hastening the return to normalcy.
Think about how a weakened immune system manifests as signs of fatigue and illness. Similarly, inadequate risk management shows up in operational inefficiencies and unforeseen hiccups.
”Effective risk management equips a company to respond adeptly to challenges, minimising damage and hastening the return to normalcy.”
But when you integrate the principles of strategic risk management, you empower your company to not only withstand challenges but also thrive in the face of adversity.
In essence, strategic risk management serves as the contemporary business equivalent of an immune system. It shields against threats, nurtures growth, and ensures adaptability.
Similar to maintaining our bodies for health, proactive risk management leads to thriving, adaptable, and ultimately successful companies. In a world of uncertainty, investing in strategic risk management is not just wise – it’s imperative for sustained prosperity.
How to boost your company’s immune system
Strategic risk management is the bedrock of a company’s resilience and success – much like our immune system guards our health.
As risk managers, here’s how you can effectively leverage this concept to unlock your company’s potential and ensure lasting prosperity:
- Prioritise value creation: Shift your focus from reactive firefighting to proactive value creation. Identify the main drivers of value within your company and concentrate resources on bolstering them.
- Eliminate value destroyers: Uncover and address elements that erode value, whether they’re operational inefficiencies or underutilised assets. By pinpointing these destroyers, you can safeguard your company’s financial and non-financial well-being.
- Take a holistic view of enterprise value: Broaden your perspective beyond financial measures. Embrace a comprehensive view that incorporates non-financial, sustainable metrics to ensure the long-term health and growth of your company.
- Adopt agile problem solving: Embrace an agile “fix and go” approach, similar to stem cells’ adaptability. Tackle emerging risks swiftly, focusing on resolving them while maintaining the company’s momentum.
- Champion innovation: Use risk management as a platform for innovation. Encourage teams to identify and pursue opportunities within the realm of controlled risk, fostering an environment of continuous improvement.
- Strategic resource allocation: Allocate resources judiciously based on risk insights. This ensures that critical areas receive the attention they need to flourish, while managing and mitigating potential threats.
- Have long-term focus: While addressing immediate challenges is crucial, never lose sight of the long-term. Avoid being entangled in day-to-day operations and instead, direct your efforts toward aligning risk strategies with the company’s overarching goals.
By implementing these actionable strategies, risk managers can elevate themselves from reactive problem solvers to proactive architects of the company’s success.
In a world where uncertainty is a constant, your role in fortifying the company’s immunity to risks and maximising its potential is not just invaluable – it’s pivotal.