Risk and Operational Excellence – Two Sides of the Same Coin
Risk is a part of all our daily lives. Every day we face challenges and risk that may impede our progress toward our daily goals. For example; what if I oversleep, the car doesn’t start, the kids are sick, or the bakery was out of my favorite pastry? We even instinctively define methods for dealing with those risks. We may set an alarm, have a copy of the train schedule, be able to work from home, or reason “I have been meaning to lose a few pounds and didn’t need that pastry anyway”. Thus, we know that some treatments or controls for these risks may require action or cost to mitigate the impact. Some risks may require no action or cost, but simply an acknowledgement of their existence. However, if we failed to plan, our entire day can be thrown into chaos before it even begins. But, when we overcome these challenges, the reward of accomplishing our task seems even richer. That is why sayings like “no pain no gain” and “no risk no reward” even exist.
For many organizations, their current risk management frameworks do not tell the whole story. It is not a part of their core business and operational excellence program and it is also disconnected from their strategic planning.
When it comes to Operational Excellence, a proper view of Risk Management can provide control over your core processes, which leads to fewer deviations, errors, or loss of production. It can even drive strategy by leading to more focused business decisions, and providing the ability to clearly see which activities need our attention. This in turn can provide improved efficiency, higher quality, and even better service.
Risk Management should also be consistent across a company and ensure what is classified as a risk is not based solely on an individual’s perception. And, it should address the effectiveness with which a company addresses risk. Effectiveness should not be defined by how many new policies or procedures are implemented, but rather on achieving actual risk reduction. Risk Management with Operational Excellence will help companies achieve this by optimizing processes and resources.
Unfortunately, many organizations do not view Risk Management this way. It is seen merely as a necessity for compliance. To address this need, iGrafx has developed ROPE (Risk & Opportunity Process Excellence). With ROPE, organizations can:
- Ensure Risks are consistently reported, reviewed, and approved across the organization
- Provide a continuous cycle of improvement for identified risks
- Ensure standards and requirements are properly captured for audit compliance
- Identify possible compliance issues with reporting on process and risk gaps, impacts, costs, etc.
- Make Risk Management a part of the culture with transparency of where risks exist along with clearly identified ownership
When we really understand what we are good at and effectively manage risk, we enable our organization to clearly define strategy and achieve operational excellence. If you would like to see iGrafx ROPE in action, please view the following recorded webinar.