Once upon a time in the world of business, risk was seen as something to be feared, a looming specter of potential failure. However, in a time of rapid change and innovation, a new perspective emerged, one that recognizes the positive potential of risk as a catalyst for growth and transformation. If you missed our recent RiskInsider Webinar and couldn’t attend the IIA/ISACA GRC Conference, let me fill you in on how you can embrace risk for a brighter tomorrow.
The journey begins with a simple question- “Is risk a bad thing?” Traditionally, it’s seen as something negative, a deviation from the status quo. But what if I told you that risk is not just necessary but also beneficial? It’s the driving force behind innovation, change, and expansion.
Consider this: Without risk, there would be no progress. Every significant advancement in history- from the cotton gin to the iPhone- involved some level of risk. It’s an essential element in the world of business, where organizations must innovate and adapt to keep up with the ever-accelerating pace of change.
Seeing Risk Differently
It’s time we change that perspective. We need to start seeing risk differently, not as a hindrance but as a pathway to growth. But what does this shift in perspective entail?
It means putting the customer at the center of everything we do. It involves delivering meaningful digital experiences, such as telemedicine in healthcare, online citizen services, or payment apps in retail. To enable these experiences, we must also provide employees with the necessary tools—collaboration platforms, video conferencing, and support for remote work. This shift towards innovation and customer-centricity is essential for staying competitive in today’s business world.
Embracing Innovation’s Risk
Innovation is inherently risky. It often requires us to step out of our comfort zones and take chances. However, the fear of risk can sometimes paralyze us, preventing us from taking those necessary leaps of faith.
Consider the COVID-19 pandemic as an example. In the early days, organizations faced a choice: embrace the risk of rapid digital transformation or face potential obsolescence. Many chose the former, quickly adopting digital solutions to keep their services running. This accelerated digitalization might have felt like a band-aid solution, but it was also the first step in making risk-driven decisions.
The key here is not to avoid risk but to understand it. By being proactive, we can anticipate possible risks and confidently pursue strategies that are valuable to our customers, profitable for our organizations, and impactful to our employees.
Overcoming Visibility Challenges
While understanding and embracing risk is crucial, it’s often challenging to gain clear visibility into the risks we face. Several impediments hinder our ability to see and understand these risks:
- Silos within Teams: Information security, compliance, and risk teams often work in silos, with little communication between them. This lack of collaboration leads to duplicated efforts and confusion about who owns which risks.
- Accelerating Data Volumes: The speed of digital processing and the sheer volume of data are growing at an unprecedented rate. Organizations are expected to be available 24/7 while ensuring data security and compliance—a challenging task.
- Manual Processes: Many organizations still rely on time-consuming and inefficient manual processes, including spreadsheets, to manage risks and compliance. These processes are error-prone and inconsistent.
- Inconsistent Terminology: Inconsistent definitions of terms like “risk,” “threat,” and “vulnerability” can lead to misunderstandings and miscommunication within teams.
- Executive Understanding: Executives often struggle to understand the value of investments in information security and governance, as these investments are not always presented in clear business terms.
To tackle these challenges, we must assess risk against our business priorities. Traditional risk management often fails to provide a clear view of risk’s impact on our objectives, products, or expansion plans. Instead, we must approach risk management more strategically by starting with business priorities and initiatives. By aligning risk management with these priorities, organizations could automatically visualize the relationship between their goals and risk, gaining contextual insight to communicate risk more effectively.
RiskInsider Tip- Communicating Outcomes, Not Metrics
When discussing risk with senior management and the board, it’s essential to frame it around business objectives. Instead of drowning them in operational metrics, have an open conversation about desired outcomes. By connecting risk to strategic business objectives, we become advisors and business accelerators rather than mere enforcers. This shift makes risk tangible—a business advantage instead of a liability.
Your Path Forward
When we frame risk around business objectives, it becomes more accessible to see, understand, and act on. To successfully leverage risk as a business accelerator, we need insight, intelligence, and automation.
- Insight- Everyone in the organization needs timely access to the right information. This could be a single-pane-of-glass view or on-the-fly generated reports that help make effective program decisions.
- Intelligence- Silos and gaps in understanding create high risk. Intelligence bridges these gaps by enabling different teams to collaborate effectively and align their actions.
- Automation- Security and GRC teams are often stretched thin. Automation helps maximize the team’s efforts, allowing them to focus on critical tasks and stay up-to-date with changing regulations.
But that’s easier said than done. When I was a Risk Manager, I would get asked often how a control failure impacted our organizational risk posture. It was a question I struggled with. Compliance and risk are closely interconnected, but often, organizations fail to see the bigger picture. Understanding how different parts of your organization, including frameworks, controls, evidence requests, third-party vendors, threats, vulnerabilities, and risks, interact is crucial.
Failing to understand these interrelationships and dependencies can lead to misaligned decisions, both within your risk and compliance teams and with your organization’s objectives and risk tolerances.
Use Compliance to Reduce Risk
Organizations engage in compliance activities for various reasons, often dictated by their industry and the data they handle or demands from customers and prospects. Rarely is it approached as a way of managing risk. When I ran an internal compliance team, I often felt like we were “doing compliance for the sake of compliance”- failing to properly communicate the value of our work.
Instead, we should be focusing on how effectively our controls reduce risk- communicating the organization’s risk exposure due to control failures. This approach helps you prioritize compliance activities that have the most significant impact and value to your organization while justifying investments in compliance.
Take the Risk with RiskOptics
A risk-first approach to compliance allows you to assess how effectively your controls reduce risk. By understanding and building the relationship between framework requirements, controls, and risks, organizations can reuse control implementations and evidence to meet multiple framework requirements AND demonstrate risk reduction simultaneously. And that’s where RiskOptics comes in. Our products, ZenGRC and ROAR enable customers of all sizes to meet their compliance and risk goals.
- Pre-seeded risk and threat scores provide an immediate baseline risk out of the box;
- Multiple mechanisms for collecting, verifying, and assessing evidence increase efficiency and accuracy;
- Cross-object connections automatically update risk scores as compliance activities are conducted;
- Automated workflows for assessments and treatment plans facilitate rapid response and remediation.
- Real-time reporting ensures everyone has the right information at the right time.
The journey from viewing risk as an obstacle to embracing it as a business advantage is transformative. It involves shifting our perspective, understanding the interplay between risk and compliance, automating processes, and effectively communicating risk.
By taking these steps, we not only reduce the negative impact of risk but also turn it into a catalyst for growth, innovation, and strategic decision-making. Risk isn’t just a challenge to overcome; it is a powerful tool for accelerating your business. By embracing risk and adopting a risk-informed approach to compliance, organizations can better navigate the complexities of the modern business landscape with confidence.