Case Study of a Research and Development Organization

Business Unit of an R&D Organization

 

Risk Wise provided an achievable  strategy to efficiently integrate systematic risk management into the client's business practices. The client saved the time, money and effort that would have been squandered in developing a separate layer of management control for risk.

"The ERM processes introduced by Risk Wise enhanced our business planning processes. It's helped us make better-informed decisions on large, multi-year initiatives and to set robust selection criteria for new and ongoing projects."

Situation:

A research and development (R&D) organization was looking to implement more systematic risk management to improve its performance in the face of a changing business environment and uncertainty of its funding sources. It also wanted to have more demonstrable accountability and to respond to findings of the auditor general. The objectives for the project were to determine (a) how ERM can be used at both the project and business unit level, (b) the roles and responsibilities necessary to sustain ERM at each level and (c) how the business unit’s staff can undertake ERM processes and apply them to planning, decision-making and priority setting activities.

What we did:

Risk Wise Inc. teamed up with Acuratek Inc. to deliver an Enterprise Risk Management (ERM) pilot project for a business unit of the research and development organization. The consultant team used a four-pronged approach to implement ERM which included (a) gathering the background information on the business unit’s operational and external environment necessary to develop the business unit’s risk register (b) educating executives, managers, and key employees in fundamental risk management concepts, (c) facilitating the assessment of the organization’s risk exposure, and (d) developing a pragmatic strategy for full ERM implementation.

The consulting team began by introducing ERM concepts to key leaders, managers and staff in the organization. This was accomplished by designing and distributing a user-friendly workbook that provided an overview, definitions and the operational dimensions of risk management as well as an initial risk register. The risk register covered external and internal risk sources. Selected business unit managers and staff were encouraged to complete the workbook. Subsequently, Diana and James conducted interviews with key members of the business unit’s team to discuss the objectives of the ERM pilot project, and to gather data on their business environment and processes, its risk culture and risk appetite, along with specific risk exposures for the risk register.

The consultant team designed and facilitated a workshop involving the business unit's management team. The workshop outcomes included: (a) reinforcement of ERM concepts, (b) presentation of a summary of the organization’s risk culture, risk sources and management context (c) customization of a risk classification scheme that can business unit can use to assess all its risks, (d) assessment of business unit’s top risks using a risk mapping method (e) information and advice on assessing the effectiveness of ERM, selecting risk treatment options, RM roles and responsibilities and methods for integrating RM into the business unit’s systems.

Results:

The interview and the workbook provided a quick education in risk management that brought the members of the management team to a common level of understanding and gave them a common language to discuss risk issues and make defensible and transparent risk management decisions. Based on the interview findings, the project team customized the risk register to reflect business unit’s risk sources and summarized the data gathered on the Institute’s risk management context. The business unit received customized tools to assess risks. They learned how to assess the strengths and weaknesses of their risk management practices. They received a written, high-level strategic plan of how to systematize risk management within their organization. Because their business is conducted through projects, business unit implemented Risk Wise’s recommendation to adapt their existing project management processes and systems to efficiently integrate proactive, systematic risk management into their organization, thereby saving time, money and effort that would have been squandered in developing a separate layer of management control for risk.


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