Three Steps for Changing Risk Management

Change and the three core steps of initiate, effect and sustain, that organizations must address when going through any transformation.

Change is difficult. It forces people out of their comfort zones and thrusts them into a state of uncertainty. If change on an individual level is demanding, change at an organizational level is downright gruelling. The output of successful change means that control systems are designed, operated or maintained differently.

In the context of risk management, organizations will have to transform how they manage risks and what relevant information is communicated to decision-makers and stakeholders. For any organization on the journey to transform risk management, success will hinge on addressing the following steps of change: initiate, effect, and sustain.

Initiate: Thorough stakeholders identification and engagement is essential to successfully initiating change within an organization. Any organization embarking on changing risk management must be able to articulate the following to affected stakeholders: 

  • How is risk management going to be different
  • Why it is important to the organization; and 
  • What does it mean for them 

Organizations need to paint the picture of the desired state for risk management. A terms of reference for any change initiation helps the ‘selling’ process and keep the focus on what the organization wants to accomplish. 

Effect: The next step is determining what needs to be done and what is required to enact the change. The chances of successfully implementing change will improve by being able to articulate the following in the change management plan:

  • What does the organization want to accomplish
  • When implementation will take place
  • Who is involved
  • What resources are required (both external and internal)

A resourced plan whether through the budgeting process or secondary financial allocation process has a much greater chance of becoming reality.  In order to effect change in a meaningful way, those accountable for leading the change need to be able to articulate what the desired state is going to look like in the immediate and near future. They need to foreshadow the conversation about when the desired state has been achieved and the team is celebrating a job well done. If stakeholders can see that vision, then the chances of effecting change will increase dramatically. 

Sustain: This is the challenge that many face when effecting change – making the change stick. Countless changes within organizations are the result of an individual who drives the change not because of the system that has been developed, but in spite of it. To avoid this fate, organizations must be able to test whether the change is:

  • Integrated - key value chains within the organization are designed, operated, and maintained to deliver updated objectives
  • Systematic - consistently applied across value chains and locations
  • Achieving what was set out to accomplish - in terms of outputs, outcomes and effects 

Navigating through change places immense stress on an organization’s people and resources. However, if it is done with a clear purpose and goals, and is properly planned and resourced, it can unlock new opportunities that the decarbonization economy is offering.

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