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Managing risks at the right level

Managing risks at the right level. Nigel Vereker Product Manager, Risk Decisions Ltd. Enterprise Risk Management. E is for Enterprise (projects, programmes, operations, business units) R is for Risks (are they at the right level?) M is for Management (Dilbert!). ERM. Part 1.

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Managing risks at the right level

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  1. Managing risks at the right level Nigel Vereker Product Manager, Risk Decisions Ltd

  2. Enterprise Risk Management • E is for Enterprise (projects, programmes, operations, business units) • R is for Risks (are they at the right level?) • M is for Management (Dilbert!) ERM

  3. Part 1 E – is for ENTERPRISE… EVERYBODY, EVERYWHERE

  4. Guidance Projects Support Groups Logistics Information Prime contractors Contractors / Supply chain Sub-contractors / Supply chain Integrated Risk Management Executive Board Programme Functions Operations

  5. Interfacing with all disciplines • Requires: • Business understanding • Communication skills • Ability to add value • Persistence Project Risk Management

  6. Consistent risk process • Unified process across enterprise • Corporate, functional, programme, project, operational • Consistent language • Allow for dialects • Interfaces with other business processes • Simple mechanisms for working together

  7. Part 2 R - is for Risk …recognise and respond

  8. No. of Problem causes Established Cost of Recovery Best practice <Left Shift Emergence as issues Tackled as potential problems

  9. Part 3 M – IS THE KEY TO ERM…MANAGE IT!

  10. Practical implementation Corporate Risks Informed Decisions Strategic Risks + Risk Appetite Priorities Strategic Mitigation Authorisation Behaviour Significant Tactical Risks Confidence Tactical Risks

  11. Enterprise and Project Risk Process • Multiple processes can be implemented through configuration: • Terminology (labels & visibility) • Statuses • Response types • Categories (unlimited groups)

  12. Enterprise and Project Scoring

  13. Hierarchy tree – Responsibility, Authority Hierarchy tree – Responsibility, Authority and Escalation = Cluster = Hierarchy folder = Escalated Risk Escalated risks are shortcuts: - ‘real’ risk remains in situ (ownership unchanged) - cluster owner becomes its leader (with responsibility for delegating it once dealt with)

  14. Systemic Risk (Enterprise-wide) Systemic risks are related to each other: - This parent can ‘control’ aspects of the children - Each child remains in ‘situ’ but the parent can be escalate up the tree

  15. Project and Enterprise Reporting

  16. Too often the truth is…

  17. Part 4 Culture, behaviour, continuous improvement

  18. Culture and behaviours • Understand personal vs. company motivation • Senior managers must cast the right shadow • Risk Management is easy to put off till tomorrow! • Risk management delivers a high performing and efficient workforce

  19. Continuous improvement • Risk management is a fundamental part of our lives • Too often we take it for granted • We can always improve • Personally • In our working lives

  20. SUMMARY

  21. Conclusion • Managing risk at the right level: • needs a sound framework • talk the same language; know what’s expected; • needs everyone to be involved • Projects, Programmes and Functions; all levels of management; • takes work • learning to think wider than just your own Project …but it can help you to make a success of your project!

  22. ‘Enterprise Risk Management – managing risks at the right level’ White paper:www.riskdecisions.com Val Jonas, CEO Risk Decisions Group

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