Part 1: Integrating Risk Management with Strategic Planning - Challenges
The latest update to the article: I came back and changed this in an ongoing series of articles. Now, this is Part 1 of the ongoing series. You can find Part 2 on our page Effective RM
Integrating risk management with strategic planning is one of the most critical aspects of risk success. It not only improves an organisation's probability of achieving its objectives by mitigating risks early, but it also provides a purpose to risk teams by connecting their work to the organisation and its customers. Unfortunately, due to a few challenges, not many organisations execute this critical aspect correctly.
Let's explore some of the challenges stopping organisations from doing this right:
Siloed Functions: Many organisations operate in silos where risk management is seen as a separate function from strategic planning.
Short-term Focus: Organisations often prioritise short-term financial performance and operational goals over long-term strategic considerations.
Lack of Understanding: Unfortunately, many organisations struggle with this issue. There may be a lack of understanding or appreciation of the value that integrating risk management with strategic planning can bring.
Resource Constraints: This is grunt work—even for experienced risk professionals. Integrating risk management into strategic planning requires additional resources, including time, personnel, and financial investment.
Complexity: The process of integrating risk management with strategic planning can be complex and challenging, requiring a coordinated effort across various departments and functions.
The final point to consider is the integration of strategic planning into your GRC tools. Once organisations have addressed the aforementioned challenges, it's crucial to ensure that these tools are interconnected. This can range from basic implementations, such as a simple drop-down list in your GRC tool to link risks with strategic objectives, to more advanced integrations where both systems regularly exchange data.
We would love to hear about any additional challenges you've encountered in this space. We are also here to help if you are in the midst of these challenges.
Effective RM
#risk #strategy
