The Context of Risk Profile Development
All of us practice some form of “risk management” by approaching life’s opportunities and challenges each day in an organized way. In the context of an enterprise, Risk Profiling is a way to help organize each opportunity and challenge to be measured and managed over time.
To build risk profiles for a company or organization, the best place to start is to understand the mission and values of the organization through it mission statement. For example, the mission statement of Apple Computer after Steve Jobs died has been reported as,
“Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.”
During the 1980’s, Steve Jobs reportedly stated Apple’s mission was,
“To make a contribution to the world by making tools for the mind that advance humankind.”
Which statement provides the best context for building Risk Profiles at Apple Computer? They both do, because each mission statement helps to define the context to meet the future opportunities and challenges of the organization.
Therefore, Enterprise Risk Profiling is an organized way to identify, analyze, treat, and monitor challenges to support the organization’s opportunities and values. The primary questions to ask before any effort to create Enterprise Risk Profiles is “Do we have an approach and framework to understand our mission’s opportunities and challenges?” In other words, “How do we maximize our opportunities to create value which include identification, analyses, treatment, and management of risks”?
Each organization is different, but generally it starts with the senior executives and directors clearly articulating the goals and objectives of the organization to maximize value. Thereafter, the organization needs leadership and resources to execute the strategies to achieve the objectives. Within the execution of the strategies, Risk Profiling gains its necessary context.