Think piece · 7 pages · by Dr. Lianne Lefsrud

Why has the value of risk management been so difficult to measure?

If risk management pays, why is it so hard to show?

The follow-up to What is the value of risk management? Dr. Lianne Lefsrud sets out four steps to getting full value from risk management: a common language and data for risk, regular risk assessment, risk embedded across management systems, and incident analysis that reveals leading key risk indicators. Includes a Bayesian network case from an energy company.

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FIRST. A common language and data for risk, including when to ask about the denominator.
SECOND. Regular risk assessment, especially for high-consequence Stuff That Kills You (STKY) hazards.
THIRD. Risk management integrated across business functions through systems thinking, not kept in a silo.
LASTLY. Incident analysis and machine learning that reveal leading indicators and precursor conditions, with a case where 47% of incidents traced to asset integrity weaknesses.

Who should read it?

Leaders asking whether their risk data means anything, and risk professionals ready to move from compliance to insight.

Solution

Integrate Risk Management Efforts Across Diverse Operations and Geographies

Solution

Why has the value of risk management been so difficult to measure?

Who should read it?

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Integrate Risk Management Efforts Across Diverse Operations and Geographies

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