It is often said that the benefits of Risk Management are intangible. No argument here. It's tough to say "You were successful because I helped you manage your risk" when you are talking to an already successful CEO. How then do you demonstrate the benefits of Risk Management?

One approach is around the concept of Intellectual Capital. When we talk about the value of a business, we talk about book value and market value. The difference between book and market value is often described as the intangible asset value or the value that the intellectual capital within the organisation brings to the table. What does intellectual capital have to do with Risk Management? Risk Management enhances intellectual capital because its main role is as a knowledge enabler. Risk Management enhances the knowledge of people within the organisation and based on the principle that the sum is greater than the whole, it enhances the sum of all knowledge in the organisation.

•  Risk Management enhances the knowledge of the keepers of the real assets such as cash, property, plant and    equipment so that these are better protected and better conditioned to withstand impacts and take advantage of opportunities.

•  Risk Management enhances the knowledge of keepers of other assets of the organisation such as key processes and systems to ensure they too can withstand impacts and take advantage of opportunities.

•  Risk Management also enhances the fundamentally most important asset of an organisation - its culture. Risk Management helps drive people's behaviour towards better decision making.

If you can work on your sales pitch to executives around these concepts you will be even better placed to sell the intangible!

www.rmpartners.com.au

 

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Bryan is a management consultant operating since 2001, specialising in risk-based decision making and influencing decision makers, born from his more than twenty years of facilitating executive and board workshops.

Bryan’s experience as a risk practitioner includes the design and implementation of risk management programs for more than 150 organisations across the public, private and not-for-profit sectors.

Bryan is the author of Risky Business : How Successful Organisations Embrace Uncertainty; Persuasive Advising : How to Turn Red Tape into Blue Ribbon, and Team Think : Unlock the Power of the Collective Mind [to be published in 2022].

He is licenced by the RMIA as a Certified Chief Risk Officer (CCRO) and is the designer and facilitator of their flagship Enterprise Risk Course since 2019.

<a href="http://www.bryanwhitefield.com">www.bryanwhitefield.com</a>

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