The ability of businesses to survive and thrive often requires unconventional thinking and calculated risk taking. The key is to make the right decisions - even under the most risky, uncertain, and turbulent conditions. Based on their combined decades of experience as practitioners, consultants, and advisors to numerous business professionals throughout the world, Rick Funston and Steve Wagner discuss the adoption of 10 essential and practical skills, which will improve agility, resilience, and realize numerous benefits. Topics covered include:
- How defining the corporate risk appetite and risk tolerances can help reduce the risk of ruin.
- Anticipating potential causes of failure to improve chances of survival and success.
- Factoring in velocity and momentum to improve speed of response and recovery.
- Improving insights for decision making and thus decision quality by verifying sources and the reliability of information.
- Identifying the potential unintended consequences of short-term decisions by taking a longer-term perspective.
Upon successful completion of this course, participants will be able to:
- Identify specific expectations and duties of boards of directors.
- Evaluate the board of directors for three potential barriers to effectiveness.
- Determine whether an organization possesses resilience and agility to survive and thrive in the current business environment.
- Interpolate three lessons learned from recent financial history into business models of risk management.
- Recognize the basic behaviors of humans towards the introduction of new ideas.
- Identify the underlying assumptions in conventional risk management that prevent organizations from preparing for extreme events.
- Distinguish between unrewarded risk and rewarded risk.
- Recognize the importance of achieving balance within an organization between the two extremes of risk aversion and risk taking.
- Identify the ten essential risk intelligence skills essential to robust enterprise management.
- Recognize that management's refusal to challenge assumptions about the environment, the industry, and the enterprise is a fatal flaw in risk management and can lead to failure of the enterprise.
- List two market forces that will challenge (and oftentimes destroy) an enterprise's assumptions when management fails to challenge these assumptions.
- Utilize two tools that will assist leadership teams in identifying and challenging the underlying assumptions of an enterprise.
- State three type of failures that characterize lack of vigilance.
- Employ two skills that will help leadership improve vigilance and situational awareness, and thus improve the resilience and agility of an enterprise.
- Recognize that some threats or opportunities occur quickly with velocity and momentum and usually take the form of sudden hits, snowballs, or spotlights.
- Identify the two actions by management in factoring in the velocity (speed) and momentum of a crisis.
- Recognize how tightly coupled systems and complexity set the stage for a failure to make key connections and manage the complexity.
- Integrate the Enterprise Value Chain, Business Interaction Model, and SIPOC analysis into risk management so as to make and manage the connections that characterize tightly coupled and complex enterprises and environments.
- Define failure and recognize thought patterns among enterprise leaders that hinder an honest discussion about failure.
- Utilize three steps management can take to change the culture of the enterprise and its processes in order to recognize the potential for failure and to identify its potential causes.
- Integrate two tools into the processes of an enterprise to anticipate potential causes of failure.
- Explain specific failures by management in verifying credible sources and corroborating the information received from the sources.
- Select practical methods of verifying sources and corroborating the information supplied by the sources.
- Recognize that failure to maintain a margin of safety, or maintaining a too-lean margin of safety, reduces the resilience of an enterprise and jeopardizes its survival in difficult times.
- Formulate a margin of safety.
- Employ specific tools to maintain a margin of safety.
- Explain the downsides of short-termism, which damages longterm growth and jeopardizes an enterprise's survival.
- Detect factors that contribute to an enterprise's philosophy of short-termism.
- Integrate four pillars into the enterprise's philosophy to help align the enterprise toward long-term strategic planning.
- Recognize the harmful consequences of risk aversion.
- Apply three tools in intelligent risk taking.
- Detect 11 root causes within an enterprise of insufficient operational discipline.
- Apply appropriate leadership, which will promote operational discipline throughout each level of an enterprise.
- Recognize that operational discipline enables an enterprise to embed each of the other nine risk intelligence skills into its ongoing performance.
- Calculate the total cost of quality (TCOQ).
- Calculate the total cost of risk (TCOR).
- Specify the relationship between cost of failure (COF) and cost of risk management (CORM).
- Distinguish between the role of the board of directors and the role of management of an enterprise.
- Describe the roles of the three standing committees within boards of directors required by the New York Stock Exchange.
- Evaluate the success or failure of an Enterprise Risk Management (ERM) framework.
- Summarize the benefits of adding a chief risk officer (CRO) or a risk council or committee to an ERM framework.
- Measure your enterprise's risk IQ.
- Recognize certain success factors in risk intelligence.
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