Strategic Risk Management
New Tools for Competitive Advantage in an Uncertain Age
Paul C. Godfrey, Emanuel Lauria, John Bugalla, Kristina Narvaez
This book presents a new approach to risk management that enables executives to think systematically and strategically about future risks and deal proactively with threats to their competitive advantages in an ever more volatile, uncertain, complex, and ambiguous world.
Organizations typically manage risks through traditional tools such as insurance and risk mitigation; some employ enterprise risk management, which looks at risk holistically throughout the organization. But these tools tend to focus organizational attention on past actions and compliance. Executives need to tackle risk head-on as an integral part of their strategic planning process, not by looking in the rearview mirror.
Strategic Risk Management (SRM) is a forward-looking approach that helps teams anticipate events or exposures that fundamentally threaten or enhance a firm's position. The authors, experts in both business strategy and risk management, define strategic risks and show how they differ from operational risks. They offer a road map that describes architectural elements of SRM (knowledge, principles, structures, and tools) to show how leaders can integrate them to effectively design and implement a future-facing SRM program. SRM gives organizations a competitive advantage over those stuck in outdated risk management practices. For the first time, it enables them to look squarely out the front windshield.