Having a thorough understanding of where your current level of risk maturity lies is one of the easiest ways to boost your risk management capabilities.
There are some simple yet effective ways to better understand and leverage your organisation’s risk maturity level - the following are some tried-and-tested methods that risk leaders shared during a recent private member meeting on the topic of risk maturity. This meeting formed part of a series of meetings centred on this theme, with Intelligence tools and step-by-step guides published as a result on our Intelligence platform.
1. Know your culture
The first stage of assessing risk maturity is to understand the culture of an organisation, the current risk management capabilities, and what the executive wants risk management to look like within the organisation. (We’ve got another blog you can read on the value of engaging with middle management first to make headway with risk culture.)
This then helps you build a set of requirements that are aligned with the values and strategic direction of the business, ensuring that you are making risk management work for you. Click here for tips on building an effective risk culture.
Risk management can then add value to the organisation’s operations, instead of just adding a layer of bureaucracy that does little to improve the overall efficiency of risk management.
2. Understand your present
Once the overall aims have been defined, you can then begin to lay down criteria against which to compare your risk management tools and processes. These criteria usually range from one to five, with one representing the lowest levels of risk maturity; five the highest.
When comparing processes against these criteria, it is important to look at how the risk management framework operates in practice, and not just at how the framework should work on paper.
3. Benchmark and compare
Benchmarking processes against industry standards, as well as other subsidiaries within a group or external competitors, is another effective way of ascertaining the current levels of risk maturity. (Our member meetings provide a forum to carry out this kind of benchmarking against peers and competitors.)
Internally, by looking at the progress made compared to previous years, as well as where the maturity may be heading in the future, you can work to incentivise improvements. Internal league tables for different departments are one useful way of incentivising healthy competition.
4. Define your goals
Once you fully understand the current level of maturity, you can then define targets for the future. Remember, however, that it is not always necessary for all areas within a business to strive for the highest level.
Sometimes there is a good enough level that, if you move beyond that, you could have better allocated resources elsewhere within the organisation. It might be useful to read five things risk managers say about risk maturity models.
Check out this adapted Intelligence case study setting out how to conduct a risk maturity assessment from a seasoned risk manager.
Are you an in-house risk manager who could benefit from collaborating with a global network of risk leaders? Find out more about membership here.
