Why manage risk?

The word risk is increasingly popular in today's language yet intrinsic in many daily activities. Essentially, risk can be defined as ‘uncertainty that matters'. Whilst most of us take responsibility for relatively simple activities such as crossing a road or cutting the grass, our expectations on others who manage risks that affect us is increasingly a focus of attention.

It could be argued that customer expectation has disproportionately outgrown industry's capacity to deliver almost anything by tomorrow at the latest. Of course, some organisations are excellent at this, particularly the grocery delivery sector. Generally however, the higher the expectation, the higher the risk. And in a media driven world with an ever discerning customer who, in addition to timeliness, is also concerned about product provenance, the potential for failure goes up a few notches.

Enterprise Risk Management (ERM) provides a mechanism to open up an organisation in order to expose and prioritise future threats and opportunities. These threats or opportunities may emanate from strategic or operational levels. In other words what's happening on the shop floor to where your organisation might be in five years' time.