RISK: IS IT GOOD OR IS IT BAD?
by Mark Miller - Business Unit Director, Learning Solutions.
Managing & mitigating risk
GP Strategies are subject to the balance of risk and reward in the same way as any other organisation. We have also worked with, and observed how many organisations manage and mitigate risk through L&D. Sometimes intentionally, other times by default. This insight has driven our emerging thinking in the area of risk and resilience and how organisations can build skills to be fit for the future.
Risk is a factor in everything we do, individually and as an organisation. It boils down to making an assessment of whether the rewards associated with a decision will outweigh the risks attached to the choice. A Cost Benefit Assessment (CBA) if you like i.e. the cost of not doing it verses the benefits of doing it.
Risk is usually a combination of the consequences of an event and the likelihood of the occurrence of that event. This is often summarised in a version of the simplified grid below.
There is usually a presumption that risk should be avoided. This is impossible and not always desirable. The ability to assess and appreciate risk such that our actions can manage the impact of risks upon a person or organisation is a better and more realistic view of the world. The ways to do this are many and driven by context - and deserve fuller attention in subsequent articles.
For now, it is important to recognise that risk also has an upside - where opportunity lies for the most savvy. We should recognise that we are able to approach it as a framework that we can provide services within. Clients can identify and manage risks based around their threats and vulnerabilities, they can also identify the opportunity and advantage that arises. This is something often neglected.
Risk, regulation & compliance
The grouping of risk with regulation and compliance is a traditional approach within many industries. It is a convenient package for the provision of Learning Solutions - though often masking the wider opportunity. Learning can be provided that explicitly addresses risk management - covering awareness, assessment, control and treatments. This is intended to extend or introduce a capability.
However, what about the much wider opportunity that provides learning that mitigates risk? By this I mean learning pathways that are not directly identified as risk, but which address risks by applying increases in knowledge and skills across an entire organisation. For instance: Information Systems training to soften the impact of the introduction of new finance systems or inventory control applications? This is something we can return to and develop.
Faced with an identified, assessed and quantified risk there are usually the following available:
1. Avoid the risk
2. Modify the likelihood or impact of the risk
3. Transfer the risk
4. Retain the risk
5. Exploit the risk
"In each case Learning and Performance improvement - across an entire workforce - will provide a strategic solution. Our skill is seeing the scope and formulating a solution that is compelling and commercial."