Risk Management - Competency
Definition: Risk represents an uncertainty that can either positively or negatively impact the achievement of business goals. Risk Management is the process of recognizing, evaluating, and analyzing those risks to reduce the occurrence of, or minimize the impact of, adverse events or to identify potential opportunities. Effective risk management can improve responsiveness to critical events and the information gathered can help improve strategic decision making.
360-Feedback Assessments Measuring Risk Management:
Survey 1 (4-point scale; Competency Comments)
Survey 2 (4-point scale; Competency Comments)
Survey 3 (5-point scale; Competency Comments)
Survey 4 (5-point scale; radio buttons)
Survey 5 (4-point scale; words)
Survey 6 (4-point scale; words)
Survey 7 (5-point scale; competency comments; N/A)
Survey 8 (3-point scale; Agree/Disagree words; N/A)
Survey 9 (3-point scale; Strength/Development; N/A)
Survey 10 (Comment boxes only)
Survey 11 (Single rating per competency)
Survey 12 (Slide-bar scale)
Survey 13 (4-point scale; numbers; floating anchors)
Survey 14 (4-point scale; N/A)
Self-Comments: Do you have to complete a self-assessment or performance appraisal? If so, the
self-comments here may help.
What are Risk Management Skills?
Risk Management Skills encompass the ability to identify, assess, and prioritize potential risks, implementing strategies to mitigate adverse effects while capitalizing on opportunities. These skills involve proactive planning, agile responses to incidents, continuous improvement, and informed decision-making to safeguard and enhance business objectives. Why are Risk Management skills important?
Risk Management helps identify, assess, and mitigate potential threats that could derail organizational goals. Risk management also helps identify potential opportunities and advantages that may be created in the process. By proactively managing risks, businesses can avoid costly disruptions, protect their assets, and ensure regulatory compliance. It also enhances decision-making by providing valuable insights into potential opportunities and challenges, ultimately leading to improved resilience and a competitive edge. In essence, effective risk management fosters stability and growth. What are key aspects of Risk Management?
Key aspects of risk management include:- Evaluating and Assessing Risk
- Being aware of risk and its consequences
- Managing, Mitigating, and Controlling Risk
- Monitoring and Embracing Risk
How can I improve my Risk Management skills?
- Evaluating Risk: Focus on developing a structured framework for assessing and prioritizing risks. Collaborate across departments to ensure comprehensive risk assessments. Engage in informed decision-making and continuous learning by staying updated with industry best practices and regulatory requirements.
- Risk Analysis: establish a systematic approach for gathering and evaluating risk data. Engage in ongoing training and development to stay updated with the latest risk assessment tools and techniques, such as Monte Carlo simulations and decision analytics. Prioritize actions based on the most critical threats and opportunities.
- Design Initiatives: Focus on continuously updating your knowledge of risk management best practices and frameworks, ensuring alignment with evolving industry standards and regulations. Engage in cross-functional collaboration to gather diverse perspectives and utilize advanced analytical tools for a more comprehensive and dynamic approach to risk management.
- Mitigation: Continuously update your knowledge of global events, supply chain dynamics, and financial trends. Leverage advanced data analytics to anticipate and plan for potential risks, ensuring you have robust contingency strategies. Foster a culture of proactive risk management within your organization, ensuring all departments are aligned and prepared to respond swiftly to adverse events.
Questions to include on your survey.
Evaluates RiskEvaluates Risk focuses on the strategic application and integration of risk management. It emphasizes determining how risk information is used, assessing risk tolerance levels, and evaluating the likelihood and impact of risks to inform decisions. This dimension is action-oriented and centers on aligning risk management practices with corporate objectives, ensuring smooth operations, and remaining compliant with regulations. It is broader in scope, considering the role of risk management in enhancing strategic decision-making and project implementation.
- Evaluates risks in terms of their consequences and likelihood of occurrence.
- Determines the risk tolerance of the company.
- Evaluates the impact of certain events on the attainment of corporate objectives.
- Uses risk management to be more effective in identifying and implementing projects.
- Uses risk management to ensure smooth operations.
- Uses risk management to remain in compliance with regulations.
- Identifies what actions the organization is willing to take.
- Uses risk management to make better strategic decisions.
- Evaluates the probability of a risk event occurrence.
- Determines how the risk management information is to be used.
Risk AnalysisRisk Analysis highlights the systematic process of identifying, assessing, and prioritizing risks. It involves gathering data on potential risks, conducting audits, and using tools like Monte Carlo simulations to quantify risks and their impacts. This dimension is more focused on the analytical and technical aspects of risk assessment, providing detailed evaluations to determine critical threats and prioritize action based on probability and impact.
- Performs a risk analysis as needed.
- Performs regular risk analyses to minimize adverse outcomes.
- Evaluates risks against acceptable risk levels.
- Gathers information regarding potential risks.
- Quantifies current business practices to make better informed decisions.
- Determines which are the serious threats.
- Conducts internal audit of risk assessments.
- Prioritizes the risks to determine the most pressing needs.
- Uses Monte Carlo Risk Simulations and decision analytics to create the best possible strategic decisions.
- Prioritizes risks based on probability of occurrence and possible impact to the company.
- Prioritizes risks to act on critical issues first.
Risk AwarenessRisk Awareness emphasizes the identification and understanding of risks. It involves accurately perceiving potential risks in various aspects of operations, being mindful of regulatory compliance, and assessing the financial implications of those risks. This dimension is centered on the proactive recognition and acknowledgment of risks as potential threats or opportunities, enabling preventative measures and informed decision-making.
- Is aware of process safety management.
- Accurately perceives potential risks in the workplace and initiates preventative measures.
- Is aware of the financial implications of certain risks.
- Accurately perceives potential risks in the workplace.
- Perceives the risks of different work tasks and activities.
- Has the knowledge and skills to accurately identify risks in the workplace.
- Identifies the most significant risks from business operations.
- Understands how to meet regulatory compliance.
- Understands that risk may represent a threat or an opportunity.
- Understands the possible financial risks of different events.
Determines the ConsequencesDetermines the Consequences focuses on evaluating the specific impacts and outcomes of risks. It involves assessing whether risks are tolerable, analyzing their effects on finances, reputation, or infrastructure, and prioritizing actions based on their potential consequences. This dimension emphasizes turning risk insights into actionable strategies, including identifying opportunities that risks may present for growth or advantage.
- Accurately determines appropriate risk levels (i.e., levels of acceptable risk).
- Determines the impact of specific risks on marketplace.
- Recognizes the potential impact of systemic risks.
- Determines if the level of risk is tolerable.
- Determines the potential financial impact of specific risks.
- Anticipates the consequences of different potential risk events.
- Recognizes the potential financial impact of specific risks.
- Seeks to capitalize on risks.
- Looks for opportunities to turn a risk event into an advantage for the company.
- Determines the impact of specific risks on reputation.
- Determines the impact of specific risks on infrastructure.
- Determines the impact of specific risks on finances.
- Determines the potential outcome of adverse risk events.
Design InitiativesDesign Initiatives centers on proactive planning and strategic preparation for risk management. This dimension emphasizes creating comprehensive risk management strategies, policies, and frameworks that align with organizational processes and objectives. It involves systematically establishing the context for risk activities, designing proportionate responses, and determining tools and frameworks to efficiently manage risks before they occur. "Design Initiatives" is about laying the groundwork for effective risk management through thoughtful preparation and structure.
- Develops policies for risk management.
- Creates a risk management strategy for the organization.
- Creates a risk profile for projects and teams.
- Creates a risk management strategy for the department.
- Develops policies to address risk situations in the workplace.
- Designs risk response activities that are proportionate to the level of risk.
- Determines a proportional response in relation to the level of risk.
- Creates dynamic and responsive enterprise risk management processes.
- Determines the proper tools to efficiently manage the risk.
- Outlines the risk management framework including responsibilities, description of the process, and guidance on evaluating risk criteria and appropriate risk responses.
- Aligns risk management activities with existing processes.
- Establishes the context for risk management activities.
- Designs risk management activities that support the success of the company.
Manages RiskManages Risk focuses on strategic and structured risk management. This dimension involves avoiding, mitigating, or transferring risks to maintain the long-term viability of the organization. It emphasizes making objective and tactical decisions based on patterns in changing information, ensuring risks are controlled and aligned with corporate goals. Leaders who excel in "Manages Risk" view risks as potential opportunities for profit but are cautious and intentional in their approach to minimize exposure.
- Effectively manages risk for the department.
- Seeks to maintain the long-term viability of the Company through effective risk management.
- Bases decisions on patterns found in fluid/changing information.
- Implements strategic risk management in an objective and tactical way.
- Works effectively to transfers risk.
- Accepts risk as needed.
- Works effectively to mitigate risks.
- Views risks as potential opportunities for profit.
- Works effectively to avoid risk.
Mitigates RiskMitigates Risk focuses on reducing the likelihood and impact of risk events. This dimension highlights implementing strategies to minimize operational setbacks, cost increases, or damages, as well as taking steps to reduce the occurrence of risks. It emphasizes anticipating risks through data analysis (e.g., purchasing or financial data) and ensuring resilience by managing risks effectively to achieve desired outcomes with minimal losses.
- Uses data from the purchasing department to anticipate possible supply chain risks.
- Minimizes operational setbacks and delays.
- Takes steps to contain the costs of responding to such events.
- Implement strategies to mitigate risks.
- Ensures all components of risk management are in place.
- Minimizes the increase in costs due to global events or supply chain issues.
- Knows how to obtain desired results with minimal losses.
- Takes steps to minimize the impact/damage of the risk events.
- Takes steps to reduce the occurrence of the risk events.
- Increases business resilience.
- Uses financial data to mitigate financial risks.
Controls RiskControls Risk emphasizes establishing systems and frameworks to manage and contain risks. This dimension focuses on implementing internal controls, developing strategies to reduce the chances of critical incidents, and ensuring informed decision-making when dealing with risky situations. It also highlights recognizing the cumulative effects of small changes and seeking to reduce uncertainties through organized processes.
- Implements changes to reduce the chances of critical incidents in the future.
- Aware of appropriate actions to minimize risks.
- Develops appropriate strategies to minimize risks.
- Recognizes that small changes may snowball into major events.
- Ensures that any risky decisions taken are based on informed decision making.
- Determines the amount of deviation from the plan that will be tolerated.
- Seeks to reduce uncertainty (risks) in the supply chain.
- Adopts a risk-based approach to establishing systems of internal controls.
- Establishes good controls over the process to better manage risks.
Embraces RiskEmbraces Risk emphasizes accepting and leveraging risk as a driver of opportunity. This dimension involves proactively seeking risks that could yield significant benefits, turning challenges into opportunities for advancement, and rewarding creativity and experimentation. It highlights a mindset of calculated risk-taking to add value, foster innovation, and gain competitive advantages in dynamic markets.
- Rewards risky ideas that may yield significant benefits.
- Identifies and mitigates risks while making informed, strategic decisions.
- Turns risks into opportunities.
- Adds value to the organization through acceptance of certain risk.
- Identifies opportunities that may be created by taking specific risks.
- Turns risks into opportunities for advancement.
- Seeks to add value to the company by embracing risk.
- Seeks specific risks that will create opportunities to advance the department/company.
- Takes calculated risks by effectively recognizing and managing them.
Monitors Risk
- Tracks risks in a project.
- Tracks and monitors incidents that may increase the risk of adverse consequences.
- Conducts regular audit of the risk management framework.
- Monitors risk events and notifies appropriate stakeholders.
- Monitors the effectiveness of risk management strategies.
- Monitors enterprise risk management activities for their impact and effectiveness on mitigating risks.
- Uses actionable data and analytics to improve risk tolerance.
- Performs monthly risk management assessments.
Risk ResponseRisk Response focuses on reactive measures and immediate actions to manage risks as they arise. This dimension highlights adaptability in responding to critical or unanticipated situations, creating contingency and continuity plans, and implementing controls to reduce losses and minimize risks to manageable levels. "Risk Response" reflects the ability to act decisively and effectively in the face of existing or emerging threats, ensuring resilience and recovery.
- Effectively responds to critical situations to reduce potential for losses.
- Able to adapt quickly to changing situations.
- Responds appropriately to unexplained or unanticipated events.
- Avoids maintaining the status quo (or standard operating procedures) when addressing new and influential situations.
- Decides what actions will be taken.
- Create continuity plans.
- Create contingency plans.
- Reduces risk to a manageable level.
- Creates a level of resilience in the organization.
- Identifies the controls needed.
Responsibilities
- Seeks to increase safety in the workplace.
- Is concerned about process safety management.
- Integrates risk management processes, data, and analytics across the company.
- Is responsible for regulatory, strategic, operational and project risk management.
- Uses risk data to generate insights and drive strategic decisions.
Supports the Process
- Committed to implementing rules and procedures to minimize risk.
- Improves process safety where possible.
- Ensures employees are aware of potential impacts by increasing risk visibility.
- Provides support to managers involved in the risk management process.
- Integrates risk management into strategic decision making.
- Works within constraints of the organization.
Risk Communication
- Maintains open communication with other departments.
- Establish roles, responsibilities, procedures.
- Communicates the protocols.
- Fosters an awareness and a shared responsibility for managing risk at all levels of the Company.
- Promotes risk management competence throughout the organization.
- Presents regular/monthly reports to the audit committee.
Training
- Offers training to reduce safety incidents in the workplace.
- Is knowledgeable of standard risk management principles.
- Creates informative guides regarding potential risks and risky behaviors.
- Attends risk management seminars and conferences.