How risk management software can support your business to grow and reach its goals
Uncertainty is an ever-present problem for businesses, making risk management software an essential tool that can help your business navigate a range of risks and ultimately support its growth strategies. But before we learn how risk management software can support your business’s risk management strategy, let’s explore why businesses need a strategy for managing risk in the first place.
Why you need a risk management strategy
Businesses need a plan and process that will scan for potential risks, provide a framework for assessing and monitoring breaches, and ensure sound decision making in response to threats. Risk management strategies will help your business:
- prevent potential risks from becoming actual threats
- develop strategies to counter a range of threats
- know when to take a calculated risk
- improve agility and decision making
- provide teams across departments with confidence in management of risks.
Consider the book publishing landscape in the early 1990s. Book publishing companies and booksellers paid almost no attention in 1994 when a tiny online bookstore called Amazon appeared, and they certainly didn’t imagine that it could grow to become a corporate threat to their very existence.
How is this relevant to risk management? Because having a strategy that aims to spot risks on the horizon, before they have even become a problem, will help management to take measures to prevent risks from becoming dangers.
More recently, while the COVID-19 pandemic took the world by surprise, the companies that were able to quickly pivot in response to the situation fared better. And while a risk analysis might not have specifically identified a worldwide pandemic as a potential threat, companies that had set up processes to manage risks were well placed to manage the decisions that needed to be made.
The risks of traditional risk management
Traditional risk management focuses on avoiding risk but it is limited by its siloed nature, with specific roles taking responsibility for different areas of risk. Each functional leader manages the risks for their area of responsibility, but no-one looks at risk management for the whole entity.
This can lead to the following problems:
- risks can fall between the cracks
- risks for the company can be underestimated by functional leaders because it doesn’t affect their functional area
- risks can be managed without considering the impact on or consulting other areas of the company
- risks outside the company can be overlooked and only internal risks that can be controlled within the company are addressed
- inability to see the magnitude of long-term risks.
Enterprise risk management (ERM) seeks to overcome the limitations of risk assessment by taking an enterprise-wide view of risk and implementing management of risk at a strategic level.
By looking at the big picture, ERM is more likely to avoid the dangers of traditional risk assessment. Companies using ERM are less likely to miss important risk signals, or to wait until the risk hits them before acting because by then, it’s too late.
You might say, “but our company already has a risk assessment process in place.” The problem is, without the holistic nature of ERM that looks at management of risk across the whole enterprise, a typical risk assessment – or traditional risk assessment – can miss things.
The key to ERM is that it is tied to strategy – what are the risks that may impede or provide opportunities for achieving a particular strategic business aim?
One outcome of ERM is that your organisation isn’t just trying to manage risk, it is trying to manage risk to achieve strategic goals. In this way, ERM can also become a tool for strategic decision-making, because risk is being assessed through the lens of strategy.
Managing reputational risks: turning strategy to behaviour
Banks, insurance, health and energy companies – and their call centres and customer service teams – are at the frontline of one of the major risks: reputational risk.
Once you have developed an enterprise risk management strategy that scans for potential reputational risks involved in customer service and monitors the impacts of changing regulations, your business can consider the risks with a ‘strategic lens’. By this, we mean that potential impacts across teams can be evaluated and managed.
This approach allows you to consider strategies for quality assurance and customer service that will help your business to grow – and improve your brand’s reputation. A key pillar of an effective growth strategy is the ability to turn the strategy into the behaviours that will drive outcomes.
Delivering results in a regulated environment requires a commitment to safe performance. Goal setting, performance indicators, performance improvement, development and on-the-job employee coaching can help your organisation achieve its behavioural outcomes.
Additionally, visibility over staff performance, coaching and oversight of leadership activities will help to track the behaviours you want to see and monitor for potential issues.
Using a risk management platform
Inevitably things will go wrong. Strengthen your risk management with systems that support and track remediation for risk behaviours. How can a risk management solution help?
- It will help you to achieve the behaviours you want to see
If you use a conduct risk management platform like YakTrak’s you’ll be able to coach for the behaviours and outcomes you want to see. YakTrak helps to turn your strategy into actionable behaviours that you want to see from frontline teams and tactical managers.
- Gives you improved visibility
Observation of conversations that team members have with customers is essential. Having insight into your teams’ interactions with customers (and their leaders) means you can see any over-steps or missteps. Team managers can intervene and follow up directly with a team member for isolated incidents. If there’s a larger pattern of behaviour requiring remediation and intervention, you can address it. YakTrak’s risk management software provides this powerful visibility.
- Makes it easier to fix things when breaches are reported
Coaching and training that focuses on remediation will help prevent future problems. An established workflow that identifies when breaches have occurred and then ensures remediation is instigated and tracked is essential. YakTrak’s customised workflows and dashboards make it easy to track remediation workflows.
- Ensures you have the evidence regulators need
A risk management solution should make it easy for you to pull data logs out of your system to provide to regulators when required. Reports that capture volume, category, trend information, and identify the activities that were taken to reduce risks such as training, customer remediation and coaching are what the regulators want to see. YakTrak’s risk management software offers this as part of its conduct risk and compliance modules.
Why use YakTrak?
While People Development teams can work hard to ensure employees have the skills to do their jobs properly, even these teams can be siloed, with Learning and Development sitting in one team, while Human Resources, Internal Communications and Employee Engagement sit in different management teams. This makes risk management across the organisation a challenge.
YakTrak helps address these risks. A unique cloud-based software platform that tracks conversations your staff are having with customers and the conversations your leaders are having with their people. YakTrak also tracks the remediation that takes place after a conduct risk or compliance breach is identified and makes reporting to management about remediation easier. YakTrak makes your risk management challenges simpler.
Get in touch with us today to find out more about YakTrak.