360° Risk

While excitement levels rise around the prospect of digital projects and transformation, threats of cybersecurity and data privacy often take a backseat. But risk management is much broader than that, and it's vital that transformation leaders manage the risks that relate to the process of transforming their organizations towards a new future. So, from strategic and operational risk at the transformation level, right down to project level risks, the right processes need to be implemented to avoid a lot of unnecessary pain and financial loss. My name is Rob Llewellyn and as you know, companies need people with the right capabilities to manage and lead transformation. As you know, orchestrating successful transformation isn't that easy. And I mean innovative transformation, which creates a new future without the constraints of the past. Which is why I hope that what I share in this episode will help you get better equipped to perform at your best as a manager, leader or consultant. If you want to learn more, go.

To studythrive.com the world's well respected authorities on transformation will concur that effective management of risk is vital to success in any transformation. In my view, risk management should live at the heart of these initiatives because only risk can threaten their success. Risk management provides fundamental guidelines to the planning and execution of digital business transformation, and it connects with every other management discipline throughout every step of the transformation. It's vital that business transformation leaders manage the risks that relate to the process of transforming their organization towards a new future, and those risks that relate more to the possibility that that desired state becomes obsolete, ineffective, or unachievable. It's important to know that there are different levels of risk involved in transformation. At the transformation level, we are concerned with strategic and operational risk. This is different to risk management at the project level. Strategic risk, which is also further divided into internal and external risk, includes the risks a company faces in terms of its strategy, execution and creation. Internal strategic risks might be related to decisions and assumptions about products and services, customers, acquisitions and senior management activities. While external strategic risk might be changes in customer behavior, market disruption and emerging technologies, or even government policy and the environment, etc. Operational risk relates to the uncertainty that the company faces that could impact the likelihood of a successful transformation. These risks might include the capabilities required to undertake the transformation, technology risks, the availability of accurate information, cultural risks, and other risks relating to people. While excitement dances around the prospect of digitization, the threat of cybersecurity and data privacy increases over and often takes a backseat. But when cybercriminals and data breach endangers business operations and poses a financial, legal, regulatory and reputational risk to your organization, cybersecurity and privacy should be on your risk map Data is becoming increasingly captured and important, so data privacy calls for close attention. The cost of data breach has been setting new record highs and the cost to organizations of data breaches has increased. Gartner predicts that by 2020, 95% of cloud security failures will be the customer's fault. So if this is the case, addressing internal security isn't enough. You need to consider how you can help the customer avoid making the mistakes that would lead to these security failures. While this hasn't been too much of a concern in the past, things are changing fast, particularly as the world embraces the Internet of everything to a greater extent, leaving organizations and customers dangerously exposed to the downside of collect vast volumes of data. Regardless of the digital solutions that your organization takes advantage of, there needs to be careful balance between serving the needs of users and customers and minimizing the risks that could lead to data breaches and cybersecurity issues. When assessing the viability of new digital initiatives, it's vital that risk is carefully considered because data privacy and cybersecurity will become an increasingly integral part of risk management and of significant importance to executives. There's a serious risk that governance culture and transformation management capability will receive insufficient attention in many companies because there are people leading digital have a blinkered view and non holistic view of the transformation journey. This is why the adoption of all Thrive principles is key. Downplay any of them and the risks will eventually begin to surface along with their consequences. It's not uncommon to see managers and leaders become disengaged from risk management practices. This results in risks not being identified and identified risks not being appropriately acted upon. Let's consider the key steps. First, you need to undertake a 360 degree risk assessment and produce a strategic risk map. Next, the risk analysis and mitigation plan should produce a detailed risk overview on specific areas which significantly impact the achievement of your strategic goals. Then, by involving the execution of the risk mitigation plan and monitoring of risks, you should produce independent estimates of schedule, costs and quality along with a financial analysis to enable the effectiveness of risk mitigations. Last but not least, the review and evaluation of risks should produce internal and external audits as well as documented lessons learned. Risk management is an enormous subject in its own right. With international standards such as ISO 31000, larger organizations tend to have someone responsible for risk management as their full time job. If this is the case, it's important that any transformation aligns pragmatically with existing practices and takes advantage of the fact that risk management practices are already present in the organization. I created Thrive to help leaders have an easy way of reminding themselves of the fundamental principles of business transformation. If the T for transformation, the H for holistic, the R for response, the I for innovation, V for value, or E for enterprise are not sufficiently addressed, risks will materialize and do what they do best, which is to pose threats to the achievement of transformational objectives and cause unnecessary concern for everyone involved.

If you want to take your transformation capabilities and credentials to the next level, go to studythrive.com.