David Hughes, Assistant VP and Head of ERM at HCA Healthcare shares insights with Bruce Branson, Associate Director of the NC State ERM Initiative about the success HCA Healthcare has had with conducting risk identification and assessment interviews with a specific focus on strategy and strategic risks.
Identifying Strategic Risks
Most ERM programs engage their leadership team in risk identification and assessments tasks that are geared towards risks that might emerge over the next 2-3 years. This approach can be dominated by a focus on operational and compliance risks, since those types of risks are often “front of mind.” David discusses how he and his team conduct interviews with the specific goal of putting strategic risk issues on the table for discussion and assessment.
Getting a Diverse Perspective on Risks
David and his team conduct over 100 face-to-face interviews each year to compile a thorough picture of risks facing HCA that may affect their ability to reach strategic and/or financial objectives for the organization. Interviewees include the Board of Directors, the senior leadership team, leaders of key strategic initiatives, division presidents and CFOs, as well as a subset of individual hospital executives (e.g., CEOs, CFOs, CNOs). By going deeper into the organization at HCA, a broad view of risks is discussed and assessed each year.
Asking the Right Questions
The interviews ask each executive to identify the top two to three risks that they believe exist for HCA and to articulate what HCA is currently doing to mitigate those risk exposures. Also, interviewees are asked whether, in their opinion, the risk responses that have been developed for these top risks are sufficient. Finally, a question that focuses on longer-term or emerging risks is included to ensure that HCA is also focused on the three to five year time horizon.
Extending the Reach of the Interview Process
HCA is able to extend the reach by utilizing a survey tool developed in house that goes out to over 400 additional participants in the identification and assessment exercise. These participants receive a list of the “top thirty” or so risk issues and are asked to choose the top two or three. An option to write in a risk that is not included I also available. By including so many additional perspectives in the identification and assessment process, HCA has the opportunity to better understand the different views of risks across multiple sectors of the organization (e.g., the board, senior leadership, hospital executives, etc.)
Interested in this topic? You may also like this article, Use Strategic Lingo Versus Risk Lingo When Engaging C-Suite Executives
