Innovation and Risk Management: A Strategic Symphony for Long-Term Success — Lloyd Emerson Johnson
The collaborative relationship between innovation and risk management is presented as a powerful means to identify opportunities, justify investments, and navigate potential setbacks. In a recent article I came across titled Driving Change through Innovation Risk Management, the fusion of innovation and risk management was explored as a dynamic strategy for organizations striving to succeed in today’s evolving landscape.
The article delved into the interplay between innovation and risk management, emphasizing their symbiotic relationship. A standout example is the case of Dagmar Turner, a violinist who played her instrument during brain surgery to safeguard her musical abilities. This innovative approach allowed surgeons to navigate the delicate operation successfully, showcasing how risk management techniques can be seamlessly integrated into innovative processes.
The definition of innovation as the creation of new value is explored, perpetuating the idea of how risk management practices can guide and inform these innovative endeavors. Drawing parallels to successful private sector initiatives, such as Nintendo’s transformative journey, highlights how astute leaders intertwine risk management practices with innovation to navigate the ever-evolving business landscape.
The pivotal role of risk appetite, particularly in the public sector sheds light on the need for a deliberate approach to risk management, aligning it with broader innovation strategies. The narrative is enriched by discussions on the importance of defining risk appetite, especially in an environment characterized by uncertainties.
Introducing the concept of scenario planning, akin to military strategist Herman Kahn’s approach, offers a nuanced perspective on risk management narratives. The article posits that risk managers possess a unique ability to articulate the consequences of both action and inaction, thereby contributing to informed decision-making.
As the article concludes, it calls attention to the rising significance of Integrated Risk Management (IRM) frameworks. The imperative for organizations to understand and navigate the balance between risk and innovation is highlighted. The subtle call to action encourages leaders to embrace IRM frameworks, fostering trust and effective risk-informed innovation.
In a business landscape marked by uncertainties, the article positions the integration of innovation and risk management as a strategic necessity for organizations aspiring not only to survive but to thrive. Adopting an IRM framework, approaching risks thoughtfully, and strategically innovating to foster long-term success are evident in the process to success.
Read the original article here.
Lloyd Emerson Johnson is a results-oriented strategic advisor. With over 40 years of international, broad-based experience, Lloyd considers various disciplines in his approach to management and board governance. Through effectively evaluating all corners of a business, Lloyd Johnson has reinvented the roles of a strategic partner and stakeholder champion. He is a creative visionary who transforms businesses to be effective throughout all of their operations and finances. The pragmatic leader specializes in risk management and ensuring that businesses are prepared for uncertain circumstances.
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