risky business
DESCRIPTION
Successful risk management as the key to business transformationTRANSCRIPT
Risky Business?“Identification and assessment of risk associated with business transformation”
Eileen Abbess, The Nichols Group
Workshop scope
IdentifyObjectives AssessPlan
mitigationImplement
plan
Monitor
A risk management process …
… and need to understand the context ie what is meant by business transformation
What is business transformation?
project
programme
people
process
technology
systems
tools
benefits
skills
What is business transformation?
For the purposes of this workshop:
“A programme of activity which transforms
how a business operates”
egchanges processes, provides new tools, changes peoples’ jobs
Identification of risk associated with business transformation
IdentifyObjectives AssessPlan
mitigationImplement
plan
Monitor
• What are the objectives?• What could impact them?• What are common causes of failure in
business transformation?
Common causes of failure in business transformation
Dec
lare
vict
ory
too
soon
Anchor
in culture
Obstacles Short
term wins
Re-inforce
Em
bed
System
atize
Legacy
Existing culture
ImperativeLevers
Emotional commitment
Change leaders
People/ skills
Seniority
Measurement
Delivery failure
Ongoing creation
Quick wins
Messages
Process
ListeningInsufficient
Mea
sure
Bene
fits
plan
Benc
hmar
k
Con
tinuo
us im
prov
emen
t
Behaviours
EngagementTools
Capabiltiy
Stake
hold
er n
eeds
Stake
hold
er w
ants
Clarit
ySim
plici
tyUrgency
Guidingcoalition
Vision
Com
munication
Source:from John Kotter’s 8 step process in ‘Leading Change’
Assessing business transformation risks
IdentifyObjectives AssessPlan
mitigationImplement
plan
Monitor
Assessing
? likelihood
? impact
? frequency
? probability
? severity
? magnitude
Score
1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Risk management perspectives?
Strategic
Operational
Project
Change
Other?
Transformation
Risk management perspectives
Strategic
OperationalProject
Transformation
“the enterprise”
Enterprise risk management
“… a process, effected by an entity’s board of directors, management and others … applied in
strategy setting and across the enterprise … designed to identify potential events that may
affect the entity … to provide reasonable assurance regarding the achievement of
objectives …”COSO
Risk assessment models
Time
CostQuality
Project
Strategic
Operational
•Our vision•Our mission•Our goals
eg•Safety Risk Model•Financial controls•Insurance
Strategic
OperationalProject
Transformation
“the enterprise”
Risk assessment perspectives
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
Score 1 2 3 4 5
5 6 7 8 9 10
4 5 6 7 8 9
3 4 5 6 7 8
2 3 4 5 6 7
1 2 3 4 5 6
A transformation risk dashboard (example)
Fail to deliver
Fail to plan
Dec
lare
vict
ory
too
soon
Anchor
in culture
ObstaclesShort
term wins
Urgency
Guiding
coalition
Visi
on
Com
munication
Existing culture
Imperatve -internal
Levers
Imperative -external
Legacy
Systematize
Embed
Re-inforce
Em
otionalcom
mitm
ent
Seniority
People/ S
kills
Chan
ge lea
ders
Simplicity
Clarity
Stakeholder wants
Stakeholder needs
Insufficient
Listening
Process
Messages
Tool
s
Measure
Behaviours
Engag
emen
t
Cap
abili
ty
Mea
sure
men
t
Del
ive
ry f
ailu
re
Qui
ck w
ins
Ong
oing
cre
atio
n
Benchmark
Continuous
improvem
ent
Benefits plan
We have covered:• What is business transformation• Common sources of risk and causes of failure around
business transformation• Risk perspectives associated with business
transformation• The importance of an enterprise wide system• How to bring the different transformation perspectives
together• The concept of a business transformation risk
dashboard• The value added by risk management to business
transformation Thank you
