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Poole College of Management
Enterprise Risk Management Initiative

ERM and Strategy

Dec 1, 2012

Managing the Risk of Disruptive Innovation

Organizations often find themselves surprised by a competitor's announcement of a new innovation. Such announcements can be hugely disruptive, and they hit the competitive environment in many forms, such as a new revolutionary business model, a completely new technology, or a new spin on an existing product or service. A December 2012 article in Harvard Business Review discusses the threat of disruptive innovation. A new product offering or a novel business model from a competitor is enough to upend any existing business and change the face of a particular market indefinitely. However, organizations can manage the risk of disruptive innovations by being proactive in regards to evaluating their own business models and those of competitors. In this HBR article, Wessel and Christensen present their approach for assessing and strategically managing the risk of disruption.

May 1, 2012

Managing Levels of Innovation Risk

The highly competitive landscape and the rapid pace of change means organizations must continually seek to innovate to survive and grow. For many, their rush to get new innovations to market overlooks critical risks that threaten the success of those initiatives. More organizations are seeing first-hand how difficult of a task it is to mitigate innovation risk. The Harvard Business Review (HBR) article "Managing Your Innovation Portfolio" highlights how organizations can, through the balance of diversifying and appropriately focusing efforts within their innovation portfolios, achieve higher returns over their long-term innovation investments. The authors of this article discuss issues dealing with managing innovation and ways to initially guide management.

May 1, 2012

Risks Associated with Product Development

With over 50 years of experience in advising companies on product development efforts, the authors of this Harvard Business Review article present six flawed assumptions that bring rise to risks associated with product development. Product development managers often follow conventional assumptions to execute their projects effectively and efficiently based on the belief that these lead to the most productive approach. But often, risks associated with product development rise due to fallacies in these assumptions causing major delays, glacial progress, and costly failures.
David Hughes

Nov 2, 2011

Interviewing as a Technique for Risk Identification

David Hughes, Assistant VP of ERM and Business Continuity Planning at Hospital Corporation of America, discusses the interviewing process the company employs to identify top strategic risks.

Aug 1, 2011

Avoiding Confirmation Bias in Decision Making

Executives today are becoming even more aware of the biases within their own mind that can prevent them from making the correct decisions. One of these major biases is confirmation bias, which is the phenomenon in which people throw away any evidence as irrelevant if it contradicts their initial notion of the situation. Increased awareness of the decision making process can help executives better evaluate situations when coming to a major decision. Confirmation bias is likely to be present in any risk identification and risk assessment task as new information comes to light that might contradict our preconceived notions about a risk event. This thought paper explores twelve questions to think through before jumping into the deep end and making a major decision with an unfounded assumption as its base.

Jan 1, 2011

Assessing and Managing Risks Related to Intangible Assets

Given that intangible assets correspond to roughly 80 percent of the value of today's corporations, it is essential that companies improve risk governance practices concerning intangible assets to mitigate against the related risks. In an article from Corporate Finance Review, the authors discuss the evolution of ERM and recommend changes to the management of intangible assets as a way of enhancing enterprise value. In addition, key elements of an ideal oversight system are reviewed.

Dec 1, 2010

A Four-Step Risk Approach to Strategy Execution

Organizations are seeing the value of adopting a risk-based approach to execute strategies in order to survive in a post-recession world. This approach enables managers to focus on opportunities in strategic plans, as well as minimizing the potential impact of threats. A recent article in the Journal of Business Strategy outlines four steps to execute a strategy using a risk-based approach.

Jun 28, 2010

Aligning Risk Appetite and Risk Exposure

The devastating effects of the global credit crisis can be linked to the failure of organizations to embed risk management within the foundation of strategic and operational processes. Now, increased pressures from all around call for an integrated and aligned approach to risk management. This white-paper explores how organizations can effectively align performance and risk management processes to not only reduce risk but also embrace opportunities.

Jul 1, 2009

Determining the Value of ERM

In the current economy, companies are under pressure to justify all major investments, including enterprise risk management (ERM). In this article, KPMG provides some common approaches for valuing ERM programs or ERM components. Placing a value on ERM can help companies realize the return of their investment through reduced costs, increased reputation, and improved decision-making.

Mar 1, 2009

Key Areas of Concern in Corporate Governance

Strong corporate governance is essential for boards as they are positioned to lead the way in implementing measures that contribute to economic growth and sustainability. There are four areas of corporate governance the National Association of Corporate Directors (NACD) has identified as being the most important and of immediate concern: risk oversight, corporate strategy, executive compensation, and transparency. Within each area of concern, the NACD provides recommendations from their Key Agreed Principles to Strengthen Corporate Governance for U.S. Publicly Traded Companies document as well as addresses future challenges boards will face in improving governance practices in each area.