In our turbulent times, the ability to clearly recognize and react to enterprise risk represents a key competitive advantage. One characteristic of effective enterprise risk management is a risk-aware culture – but this is often cited as a significant challenge to building an effective ERM program.
All employees within an organization – regardless of title, function, or location – have insights that can help an organization better understand its risks. But their insights often go unheard. In a recent extreme example, the crew of Deep Water Horizon expressed significant concerns before the explosion – but they report not being listened to.
Unfortunately risk management is often treated as the responsibility of “risk management” – not of the entire organization. For example, according to Deloitte’s Enterprise Risk Management Benchmark Survey, 67% of respondents reported only providing risk management training to specialists in specific risk management functions.
Social BI is an effective, low cost way for organizations to expand risk management beyond the risk function. Like business intelligence, Social BI aggregates intelligence from multiple sources and presents a summary analysis to decision makers. But while traditional BI provides reams of data based on sophisticated models, Social BI aggregates insights contributed by people. These people-driven insights include all of the informal knowledge that is not captured by traditional BI systems.
With Social BI, you’ll get real-time risk assessments – free from bias – that represent what your employees think is likely to happen. You’ll learn about changes that affect your risk long before this information would trickle up through the standard chain of command. You’ll hear from a diversity of perspectives. You’ll identify where there is a lack of alignment between different parts of the organization. And you’ll learn what your people think should to be done to mitigate risk.
You might be thinking, “This sounds good, but would employees actually participate?” In our work, we’ve learned that many employees are hungry for ways to help their companies address key business questions. In feedback surveys, participants consistently identify the following reasons for contributing to Crowdcast: 1) opportunity to share their insights with senior management, 2) testing their knowledge, and 3) learning from others.
If you’re looking for innovative approaches to creating a risk-aware culture and improving your understanding of key risks, consider incorporating Social BI into your ERM program.