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My first blog about the business of risk, sort of…

Thank you for stopping by!  With everyone competing for a slice of your precious time I’d just like to say, “thanks”.

This being my first official blog I thought I’d briefly explain the goal of the blog.

First, a background in risk.  The “business of risk” is a term I used to describe the field of uncertainty, risk, and opportunity.   It’s big, broad and vague.  It encompasses everything from technology to risk programs to business strategy and critical decision making.  The discipline relies on data, analytics, methods, software, process, special skills, policy, and technology platforms.  Here’s one definition:  The goal of risk management is to efficiently and comprehensively minimize exposure while maximizing the opportunity provided by understanding uncertainty.

Uncertainty is the unknown, whether it leads to positive or negative outcomes.   Risk measurement is the process of assigning possibilities to probabilities in an attempt at clarifying uncertainty.  This is only possible when the data is available and the methods we used to measure are proven and repeatable.   Risk management on the other hand typically refers to the endless stream of functional or topic based programs (ERM, BCM, EHS, ER, CC, CM, QM, QC, Cyber-security, physical security, K&R, compliance, and on and on) used to implement the policy in the most efficient and effective way.

Next, a discussion about purpose.   Although many consider risk management a discipline on to its own the reality is that its purpose is to support the business strategy and critical decision making.  Taking risk is a necessary, foundational principle of business – you take a risk and expect a reward.   Take bigger risks and yes, expect bigger rewards or positive outcomes.   However, what if the person taking the risk does not possess the insight into the potential consequences and opportunities of that risk if it materializes?  What if the decision maker has the insight but ignores it and proceeds recklessly; i.e. they put the pedal to the metal and proceed without considering the potholes, weather and road closures?

Risk versus reward, a saying that you’ve probably heard hundreds of times.  Maybe it would be better stated as reward versus risk.  The fact is that for risk to be present there must a need and a way to fill that need that is both profitable to the customer and the business creating it.  A risk is inherent in every decision, there is no way to know every outcome.  However, an opportunity exists if we know more about the potential outcomes than our competitors, suppliers, producers, and customers.

Finally, why blog and the goal.  My goal and passion are to bring greater value and purpose to the concept of uncertainty navigation and risk management.  But the value I intend to bring is not defined just in terms of the risk management professional or business leader.  It also includes how the market defines value; i.e. customers, investors, communities, suppliers, producers, competitors, regulators, and those thinking about entering the market.  The goal is to address the practical reality of the topic, i.e. what happens not just in words but in actions.  It includes connecting risk, in a more measurable way, to the business goals; creating value and growth, gaining competitive advantage, achieving profitability through sustainable performance.  A mouthful but certainly the only way that true “value” can be derived from your risk investments.  With your help and feedback, we will get there.

“We cannot direct the wind but we can adjust the sails”  – Dolly Parton

 

By Gary S Lynch

I am the Founder and CEO of The Risk Project, LLC a risk, uncertainty and opportunity advisory firm. As a management consultant, business developer and market analyst at Booz Allen Hamilton, Gartner Group and Marsh, I was responsible for defining market strategy, commericalizing capabilities, and developing businesses. I've helped dozens of organizations create new revenue streams. I've also held the position of Risk Executive, CISO and Global Leader - Office of Business Continuity at JPMorganChase, Prudential and Prudential Securities.

Throughout my career I worked with senior leadership from startups, academia and government agencies to life sciences, hi-tech and financial institutions. I was a founding member of the US Dept of Commerce's Advisory Committee on Supply Chain Competitiveness, Advisor to the WEF Global Risk Network and Sr. Research Fellow at the RH Smith School of Business, University of Maryland.

I've authored three business risk books and been a featured at the WEF, APEC, WCO, NIST, NACD, AIAG, RIMS, MIT CTL, Robert H. Smith School and the Desautels School of Management/McGill University.

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