Risk Management Best Practice 5a – Monitoring for Organization-Wide Performance Risk Associated with Large Capital Projects

StrategyDriven Risk Management Best Practice ArticleLarge capital projects represent a significant investment on the part of an organization and can therefore impact, either positively or negatively, the company’s financial position, if not its viability. Consequently, executive and manager attention and financial support may be disproportionately applied to the capital project(s), particularly in the event of overruns, at the detriment of problem resolution at the organization’s other operating assets.

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Risk Management Best Practice 5 – Ongoing Risk Monitoring

StrategyDriven Risk Management Best Practice ArticleEvery organization is challenged by risks manifest through its many different day-to-day operations. To help monitor and manage these risks, most organizations employ groups providing performance and compliance risk assurance so that significantly adverse consequences are avoided. These groups typically carry out their function through the conduct of periodic, in-depth assessments of those areas representing the highest risk to the company. Such assessments are both costly and time consuming; their accuracy rapidly diminishing with the passage of time since the assessment’s performance.

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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

StrategyDriven Launches Operational Risk Management Resource Forum

StrategyDriven is proud to announce the launch of a risk management resource forum; providing innovative thought leadership and collaboration opportunities to help leaders effectively address their most pressing operational risks.
StrategyDriven Risk Management Resource ForumAfter seeing the devastation from the Texas fertilizer plant and Louisiana chemical plant explosions, StrategyDriven wanted to help industrial and utility leaders better identify, mitigate, and control their operational risks to prevent similar accidents from occurring at their facilities.

“The unfortunate reality is that industrial accidents are increasingly likely in a world challenged to produce more, faster, and with fewer resources while also dealing with the significant loss of operating experience resulting from the retirement of baby boomers,” explains Nathan Ives, StrategyDriven’s President and Chief Executive Officer. “To help clients combat these risks, StrategyDriven advisors, applying decades of nuclear and high-risk industrial operations experience, authored a library of operational risk management tools easily accessible from our online risk management forum.”

Developed by highly experienced nuclear and industrial complex leaders, StrategyDriven‘s risk management resource forum provides actionable methods and tools executives and managers can use to identify, assess, prioritize, monitor, mitigate, and control their operational risks. Thought leadership items contained within the forum focus on topics such as:

  • Operational Risk Quantification – identification of unique risk index values associated with potentially adverse events enabling prioritization of their mitigators relative to the organization’s portfolio of operational activities and strategic initiatives
  • Integrated Enterprise Risk Assurance Mapping – visualization of the relationships between enterprise risks and their associated processes while concurrently revealing the degree of oversight applied to these processes
  • High-Risk Decision Management – identification, selection, and implementation of action plans to address strategically important and operationally hazardous circumstances, the outcomes of which impact the safety and reliability of employees and assets

The risk management forum’s thought leadership documents are being distributed to StrategyDriven‘s clients, including some of the world’s largest utility operators. These documents can be accessed by clicking here.

Risk Management Warning Flag 1 – Unadjusted Resourcing of Risk Monitoring Activities

StrategyDriven Risk Management Warning Flag ArticleMajor projects typically add significant operational, financial, reputational, and regulatory risk to an organization’s overall risk profile. This project risk may by itself exceed the normal level of organizational risk leaders are accustomed to dealing with.

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StrategyDriven Risk Management Forum

StrategyDriven Risk Management ArticleAll organizations face a host of risks incurred during the conduct of day-to-day business operations and stakeholder interactions. These risks challenge executives and managers in so far as they can have consequentially negative impacts on the organization’s ongoing sustainability from an operational, financial, reputational, and regulatory perspective.

Risk = Probability of an adverse event’s occurrence times the severity of the event’s impact should it occur

Organization leaders seek to manager their risks’ likelihood and/or impact; identifying, assessing, and prioritizing followed by monitoring, mitigating (accepting, avoiding, minimizing, or transferring), and controlling each risk. Effective risk management optimizes the cost of risk monitoring and mitigation with the expense incurred should the event occur.

Focus of the Risk Management Forum

Materials within the risk management forum focus on those principles, best practices, and warning flags associated with the effective monitoring, mitigation, and response to both identified and unidentified – Black Swan – risks.

For detailed insight on making and managing high-risk decisions, visit StrategyDriven‘s Decision-Making Forum.

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