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Using Risk Management for Strategic Advantage Dr David Hillson PMP FAPM FIRM MCMI

By Lower Heyshott and Hampshire Gu Pz

Abstract

Risk management is recognised as an essential tool to tackle the inevitable uncertainty associated with business at all levels. Its use is however often restricted to the technical or operational field, addressing threats to processes, performance or people. Recent developments in risk management seek to broaden its scope to include strategic risks to the business, and to address upside opportunities alongside threats. Such a holistic approach positions risk management as an essential bridge between strategic and tactical levels. This paper explores the critical success factors for expanding risk management to deliver strategic advantage while retaining its use as a tactical tool. Strategy, Tactics and Risk Businesses exist to create benefits for their stakeholders, and the corporate vision or mission statement defines the scope and extent of those benefits, as shown in the left-hand side of Exhibit 1. However vision alone does not create business benefits, and many organisations use projects as the change vehicle to deliver the capability which leads to the required benefits, perhaps managing related projects through higher-level programmes (see right-hand side of Exhibit 1). Defining the vision and business benefits is the realm of strategy, whereas projects, programmes and their deliverables describe the tactics by which the strategy is achieved. Project (an

Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.195.3930
Provided by: CiteSeerX
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