Strategic Risk Management

The term Strategic Risk Management was first used in 1992 to describe a number of methods for systematically trying to anticipate and manage external events and trends of strategic significance and thereby reduce the risk to the business. In 2005 the Harvad Business Review carried an articel by Adrian J. Slywotzky and John Drzik that built on the original thinking, this is a quick summary of their ideas.

• - Preparation for a major risk enables mitigation of that risk and makes sense to protect company stability.
• - If you prepare better for risks than your competitors, who simply manage risks in the "old" way, you have a source of competitive advantage.
• - Tool for thinking systematically about the future and identifying opportunities.
• - You can turn strategic threats into growth opportunities. Moving from the defense into the offense.
• - Probably the benefits of SRM outweigh those of other, less strategic forms of managing risk.
• - Avoiding insolvency risks or earnings volatility.
• - You can better utilize capital and reduce its costs.
• - Organize systems and processes that increase the Risk-Adjusted Return on Capital of the firm.
• - Protect corporate reputation.
• - Helps companies to fend off additional regulatory and legislative assaults on how they run their businesses.
• - Helps corporate executives to defend themselves against legal lawsuits of the sort that have been filed against former Enron, Tyco and WorldCom executives.

• - Strategic risks are just one of four categories of risks (Others are: financial-, hazard, and operational risk).
• - Certain risks may occur and cause irreparable damage despite anticipation and preparation ("Acts of God").
• - No company can anticipate all risk events.
• - SRM is not a box-checking exercise: there are substantial costs and efforts involved to SRM.
• - A major potential issue in accomplishing progress with regards to SRM is that in light of Sarbanes-Oxley and other post-Enron developments, companies may likely view SRM as simply another regulation being imposed on them rather than new "ground rules" that, if followed enthusiastically, have the potential to provide global competitive advantage and enhance shareholder value.

• - It is possible to prepare for major future risks.
• - Preparing is useful.
• - It is possible to turn risks into opportunities.

What Can Garou Do for You?

Garou can provide a full range of consultancy services for any size of organisation, here is a quick overview of what can be undertaken.

Business Strategy
This involves long-range planning, the re-organization of a company's structure, rationalization of services and products, and a general business appraisal of the company.

Manufacturing & Business Services
Involving a review of the layout of a production department, production control arrangements, productivity and incentive schemes or quality control problems

Financial & Management Controls
The Installation of budgetary control systems, profit planning or capital and revenue budgeting, office reorganization and administrative arrangements

Human Resources
Advising on personnel policy, manpower planning, job enrichment, job evaluation and industrial relations

Information Technology
Defining information needs, the provision of software, systems analysis and design, computer feasibility studies, implementing computer applications, and making computer hardware evaluations

Environmental Management
This includes urban and regional development planning, international economic research, cost benefit and social analysis studies and physical economic, ecological and sociological studies for the encouragement of quality of lifestyle

Quality Management
Setting of policy strategy, customer satisfaction, performance measurement, people management and processes

For a more detailed look at something that you could take full advantage of have a look at a quick overview of Strategic Risk Management