A modern approach to managing risks

Welcome to the first of five articles in our series on enterprise risk management (ERM) for private companies. Before we dive in, let’s set the risk-management scene, as it’s been around for quite some time.

Take radar systems, for instance. They were introduced in the early 20th century, with the primary purpose of preventing ships from colliding on the high seas. From this narrow but important starting point in managing risk, radar technology continued to evolve in the following decades. As new innovations yielded greater range and precision, risk was reduced due to the ability to track more objects—from aircrafts to speeding cars to atmospheric phenomena.

The above serves as an important metaphor as companies seek to become more risk-intelligent. In order to continue building organizational resilience for when disruptions occur or risks evolve, your enterprise will likely need to expand its current capabilities—just like radar technology. This is why making the right investments in talent, technology, and other resources will be critical for constant improvement. New solutions can quickly turn into new problems without the experience to implement them and determine if they work within an existing culture.

This five-part series on ERM is meant to help prepare private company leaders and family-owned enterprises as they seek to build or strengthen their risk management capabilities and supporting resources and infrastructure. We’ll help connect the dots between needs and answers, with a particular focus on identifying organizational capabilities and other considerations that will be important as your business seeks to become more risk-intelligent.

In Deloitte’s extensive ERM work with clients, we’ve noticed that success starts with a subtle mindset shift. See below for a few lessons we’ve discovered over the years, all of which will help pave the way for organizational buy-in and, ultimately, prosperous ERM projects.