According to the International Organization for Standardization popularly known as ISO, “Dealing with risk is part of governance and leadership and is fundamental to how an organization is managed at all levels.” The International Organization for Standardization improved their ISO-31000 risk management guidelines. It is a 16-page document which covers everything from risk management definition to risk management principles, risk management framework to risk management processes.
The focus was mainly on top management, leaders, and board members. Additionally, the updated version of guidelines also addresses the iterative nature of risk, which was not done in the previous versions of the ISO-31000 risk management guidelines. To help you get the best out of your risk management efforts, you will have to follow ISO-31000 risk management guidelines.
In this article, you will learn seven key lessons from ISO-31000 guidelines that will help you manage your risks efficiently.
1. Keep Stakeholders Engaged
ISO-31000 risk management guidelines put a lot of emphasis on stakeholder’s engagement. Whether it is getting executive buy-ins for your risk management program or keeping board members in the loop, keeping stakeholders engaged is critical for the success of your risk management program. Risk management is not an isolated process. Instead it should be integrated across all functions of your organization.
More importantly, it should coincide with your organizational culture and align with your business goals. Make risk management an integral part of your business strategy. Once you have all pieces of the puzzle in the right places, that is when you start to see the real benefits of your risk management efforts.
2. Consider Risk When Taking Business Decisions
Every board member should think about the risk before giving their input and should always consider risk when taking business decisions. This is very important as business decisions can make or break organizations. It can directly impact ability of a business to deliver value to their customers. One wrong decision can put your business sustainability at risk. Similarly, making right decisions can guide your business on the path of success.
Paul Gibbons, author of the book “The Science of Successful Organizational Change: How Leaders Set Strategy Change Behavior and Create an Agile Culture” writes “Businesspeople need to understand the psychology of risk more than the mathematics of risk.”
3. Focus on Implementation
ISO-31000 risk management guidelines put the responsibility of overseeing risk management process implementation on board members. They should also make sure that controls are in place and have the desired impact. If a board director does not have the subject expertise, they should call upon an external advisor to help them provide context. External advisors are also responsible for aligning management actions with strategic objectives. If the board director has adequate knowledge of the domain, he/she can take up the role of external advisor.
4. Use Available Information
It is important to put all the available information to good use. The amount of data organization manages these days makes it exceedingly difficult to extract useful insights from large data sets. It is also important to ensure that the data chief information officer provides is not only relevant and accurate but also easily understandable and delivered in a timely manner. This can come in handy when you have to respond to a cyber-attack because there is a huge disconnect between the information you had initially and the information you have after a forensic audit. Ensure that the cyber risk data you provide is authentic.
5. Risks are Cyclic
Previously, ISO-31000 risk management guidelines never addressed the cyclic nature of risk, but things have changed, and the updated version focuses on it. In fact, it has provided a new perspective on risk management. It helps security leaders not only in understanding risks but also keep those risks under control, especially cyber risks.
Everything from principles, processes and framework outlined by ISO-31000 risk management guidelines lays a lot of emphasis on strengthening the business ability to assess, convey and ponder upon risks when taking business decisions. Additionally, these risk management guidelines also help with mitigating and transferring risk.
6. Be Proactive
Even though the ISO-31000 risk management guidelines solely focus on cyber risks, it tells executives to take the proactive approach to risk management. Keep an eye out for identifying risks. The quickly you identify risks, the less damage it can do. That is why it is important to keep looking for key risk factors that can impact your business in many ways. Every department whether it is IT, HR or marketing should play their role in identifying risks and share the responsibility.
7. Track Results
Last but certainly not least is to measure progress. Just implementing risk management processes and programs is not enough. You should constantly measure success or failure. This will help you identify areas which need further improvement. Refine your risk management processes by filling in the gaps. Critically analyze threat data stored in the best dedicated server and you will be able to unearth insights that you have never seen before. At the end of the day, chief information officers should present quality information about the progress you have made regarding risk management to board members.
Let us sum it all up. The first thing you need to do is to involve all the stakeholders in the decision-making process and take their inputs. Make risk management an integral part of your process because risk can be cyclic and recurring. Always consider risks before taking every decision as you do not want to be facing the consequences after a wrong decision. Focus your attention on implementation instead of spending too much time on planning. Most importantly, you should take a proactive approach to risk management to manage risks efficiently. Just implementing risk management guidelines and forgetting it will not cut it. You will have to constantly track results to gauge the effectiveness of your risk management efforts.
Which lessons did you learn from ISO-31000 guidelines? Feel free to share it with us in the comments section below.