After 10 years working in this area I think I've obtained some wisdom I feel I have to share with you.
What did 10 years engaging in Risk Management teach to me?
Well, it is hard to answer synthetically. But yes, I have an experience to share with you which can be very significant and helpful.
We always think of risk as something that may prevent us from achieving the goals we set forth in our strategy. In other words, risks seem to be something raiding our strategy’s territory from outside and sacking it. Sometimes though, the very enemy is hidden in our territory and, unbeknown to us, plots how to endanger us. Let me give you some examples coming from these 10 years.
Sometimes examining a company’s strategy I have taken note of how often poor planning, objectives bound to an uncertain future scenario, inadequate analysis of internal and external conditions, reliance on resources still to be attained, even inability to predict strikes or diseases or natural catastrophes result in situations too hard to overcome.
The way to get out of that can be stepping back and investigate the risks with an open-minded approach, without feeling your strategy is engraved onto the Law Tables. This is something all Board members should do to excel in any situation set before them. Insisting into pursuing your strategy regardless of its outcomes and without a plan to systematically manage risks will turn your business into a disaster; insisting into exploring risks first will let you ward off it.
When risks seem to become overwhelming, when your efforts to tackle them seem to be useless, when even the opinions on how to deal with them are controversial, the best choice is probably to explore the potential risks you are experiencing to figure out whether or not it’s a good idea not to proceed with just mitigating them, but to review your strategy based upon the risks you are dealing with.
Risk management is something all Board members, executives and stakeholders need to delve into while pursuing their strategy. As said above, if risk management is not on the forefront of your daily duties, things will likely turn out bad and even fail. And it all will turn into destroying your reputation.