+ risk management 101 measuring, managing & monitoring risk: a km approach kmworld09

+ why should km care about risk? “The purpose of knowledge management is to provide support throughout the organization for improved: decision making [strategies, risk management and resource allocation], [conversation, collaboration] and innovation “This is achieved through the [enablement] of human intuition and experience…” :: definition of Dave Snowden [and Dave Pollard]

+ the purposes of risk management align risk appetite to strategy improve risk response decisions reduce operational surprises / losses address complex risks cross-enterprise identify / realize opportunities improve resource allocation (stuff that keeps executives awake at night) (= ‘problems’ management is prepared to invest in)

+ internal risks FRAUD LITIGATION COMPLIANCE FAILURE GOVERNANCE FAILURE SECURITY FAILURE SYSTEM FAILURE REPUTATION CRISIS SUPPLY COST/INTERRUPTION LABOUR DISRUPTION DEBT COST/AVAILABILITY COMPETITIVE THREATS MARKET SHIFTS INSURANCE COST/AVAILABILITY Severity ($) Likelihood (%)

+ external risks

+ the coso model understand the risk environmentset risk management objectivesidentify possible risk ‘events’assess risk likelihoods and consequencesdecide on risk responsesinstitute controls and other responses; communicate and monitor

+ understand the risk environment risk philosophy rm roles & processes risk knowledge risk infrastructure & technology

+ set risk management objectives understand objectives understand strategies risk appetite & tolerance

+ identify possible risk events risk event categories event identification understand inter- dependencies assess commensurate opportunities

+ assess risk likelihoods and consequences short-term vs long-term assessment data sources subjectivity assessment assessment techniques compound & contingent assessments

+ decide on risk responses response for each type of event response evaluation residual risk assessment portfolio view

+ risk response strategies Consequence ($) Likelihood (%) AVOID REDUCE SHARE ACCEPT ADAPT

+ institute controls & other responses; communicate & monitor identify prevent/detect controls institute/ audit controls continuous monitoring identify conflicting goals and messages external communications

+ risk and complexity: challenges uncertainty (severity and likelihood) adapt, see risk as opportunity risk interconnection assess combined risk risk incompetence / lack of “ownership” educate enterprise/environment interdependence think long-term, sustainability

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+ risk management action plan for knowledge management leaders research understand your organization’s risk strategy & processes study learn about risk management methodology and challenges analyze identify how km can help improve rm in your organization (beware turf wars) present offer the CEO your help act implement your offer

+ further learning: resources the coso model: exec summary: the coso model: full publication ($75): davos: external risks: new challenges in rm & sustainability: %20A%20Holistic%20Approach%20Report.pdfhttp:// %20A%20Holistic%20Approach%20Report.pdf