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When Risk Management Hits Closer to Home

fireMarcus Cree speaks on and consults organizations solely on the topic of risk management. He wrote this article as his house was in the “restoration stage” after a fire. Thankfully, nobody was hurt; so Cree used the situation to evaluate his own understanding of how he could apply what he teaches about risk management to a real world situation. Namely, the use of early warnings, contingency tactics, effect mitigation and team/management buy in. Cree begins by explaining the early warning aspect of any good risk management process:

In a typical financial institution, an “early warning system” would involve the risk management team understanding the level of risk that was deemed acceptable, and understanding what factors feed into this risk metric. This enables tail analysis to be done in order to understand what negative effects are hiding in the extremes of possible immediate spikes in the risk factors as they are being observed now. If the limits are set in accordance with the risk policy, then while the firm is taking active risks, these should be within the boundaries of management risk tolerance.

While the post does directly concern the financial sector, any CIO will quickly recognize the value of Cree's risk management process, and how important it is to know what to do when everything is burning around you, figuratively or not!

About Anne Grybowski

Anne is a former staff writer for CAI's Accelerating IT Success, with a degree in Media Studies from Penn State University.

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