At a high-growth business, the risk function needs to support agility and innovation. But all too often risk is seen as a hindrance, rather than a help. Having the right risk management tools and processes in place remains just as important as at any other company.
But what if traditional approaches to risk management don’t fit? For new company types that are growing rapidly, particularly if innovation and adaptability are the goals, employees need to make decisions quickly but still with an eye on risk appetite.
At a recent Risk Leadership Network meeting for risk managers in the digital space – as part of a series of meetings tailored to their unique needs – members highlighted several key challenges they currently face:
1) Keeping pace
When a high-growth company is rapidly expanding, scaling the risk function at a similar pace might not be possible. You may have to forego the traditional people-led approach to risk management, where the risk team is highly visible and very involved in decision-making throughout the organisation.
2) Square pegs
Similarly, traditional risk management methods and models may not fit these firms. Such techniques tend to rely on the risk management function to coordinate and attend meetings and help with decision-making. But in a fast-paced environment, this isn’t always possible.
3) Negative perceptions
Risk thinking should be embedded in decision-making at all businesses, but this is even more important for high-growth, digital companies. Decisions need to be made quickly and effectively, but they also need to be risk-aligned. Getting employees across a business to think this way is no easy feat.
The solution? Redrawing old lines
To overcome these challenges and add value at high-growth companies, risk managers need to develop the right tools to match this kind of company culture. Creating your own spin on traditional risk management tools and methods can help high-growth companies to overcome many of these challenges.
For example, blurring the lines when using the three lines of defence model can address the perception that risk hinders agility and create a more fitting approach for a new breed of firm.
Taking a more collaborative approach among the three lines when it comes to designing and implementing tools and controls has been a helpful approach for some firms, according to our members.
At high-growth organisations or for those in fast-paced digital markets, therefore, risk managers often need to consider creating more tailored tools, methods and processes in order to fully empower decision-makers.
Risk Leadership Network members make use of a wide range of peer-contributed case studies, guidance, tools and analysis to help solve these challenges, drawing upon tried-and-tested techniques and solutions that have helped other risk leaders drive success.
Are you an in-house risk manager who could benefit from collaborating with a global network of risk leaders? Find out more about the Risk Leadership Network approach here.
