I recently had the opportunity to lead a clinic at GSMI's Enterprise Risk Management summit in New York. It was a very interesting and interactive session where we really had the opportunity to "roll up our sleeves" and talk about how risk management works (or doesn't, for that matter) in the trenches.

The key learning for us at the workshop was that, even in well established organizations, there's not a clear definition of risk appetite and not a clear framework in place to manage risk on a system-wide basis. But, there was clear consensus on the need for enterprise risk management, and agreement that we can't "stop the train" to figure it out -- we need to integrate risk management into our management processes and cannot wait for it to be completely figured out.

The premise of my presentation (attached below for your reference) is that risk management serves as a "missing link" in traditional Balanced Scorecard implementations. Balanced Scorecard is focused on growth and reaching stretch targets -- offense, while risk management is about identifying and mitigating risks -- defense. Focusing on one exclusively wouldn't make sense and could be the root cause of some of the troubles we're now facing.

For those in the audience, here are links to some of the videos used in the presentation. Of course, the Seinfeld one is a classic.

George Castanza on Risk Management
Wall Street Meltdown
Wall Street Meltdown - Redux

Download Presentation