Loren Padelford’s recent blog post “Enterprise Risk Management and The Bottom Line” highlights the growing body of evidence that enterprise risk management can have significant impact on company performance. But to gain the benefits how can organizations engage employees and embed risk management into their business culture?
According to a Fast Company article on corporate culture it is definitely worth the effort as “performance-oriented cultures possess statistically better financial growth, with high employee involvement, strong internal communication and an acceptance of a healthy level of risk-taking in order to achieve new levels of innovation.”
Enterprise risk management (ERM) has its role in shaping corporate culture. An effective ERM program enables employees throughout the enterprise to identify, share and tackle their risks head on. The trend we see with our own customers is that they are using a common risk system to create a shared risk language and a single view of risk across the business. Increasingly, supply chain partners are being encouraged to participate too. This provides a complete and up-to-date picture of risks and opportunities for management decision making.
A strategic risk management approach helps to mitigate risks by proactively addressing them once rather than multiple times in each silo. It also empowers business leaders to take smarter risks and identify new opportunities as they have visibility across the business.
Imagine the impact on your bottom line if your organization’s culture evolved so that risk and opportunity became part of everyday discussions – something to be proactively managed, rather than avoided.
Could you be more effective at making this happen in your own business?