Risk management is the process of identifying, assessing and prioritising risks, and then taking steps to minimise, monitor and control them. Managing risk is a critical aspect of ensuring the safety and wellbeing of employees, customers, and anyone else who interacts with an organisation. The future of risk management is likely to be shaped by several trends and developments, both within and outside organisations. Whilst no one has a crystal ball, it is generally accepted that the past can help shape the future. In the context of the recent past, perhaps this has been made more difficult. However, the very much atypical events of the last three years can certainly help risk management professionals understand the context in which they are working. 
Look to the past to understand the future
When thinking about the last few years, since the onset of the COVID-19 pandemic in March 2020, it’s important to take the time to remember (and document) lessons learnt before they become lost. The danger of everything changing as quickly as it has since 2020 is that it is difficult to keep up. There is definite value in taking a step back to see how things have changed, as well as why. Whilst it might be tempting to spend time and money planning for another pandemic, the more logical option would be to think about what other risks might be coming our way in the next ten years. But how do you plan for the unplannable?
Risk departments are typically not revenue-generating departments. Callum Irvine, VP of Global Safety and Security at IHG Hotels and Resorts and co-president of IIRSM says, “Risk management people often feel apologetic about having to spend money on risk management, because we’re planning for something that might not happen. If we’re already reluctant to ask for spend on business-as-usual risk activities, could you imagine being bold enough to rock up to the executive committee and ask if you can spend money on preparing for the unimaginable?”
It poses an interesting question as to whether this attitude has now changed, post-pandemic, when every single person has had first-hand experience of the unimaginable, and remembers how it affected our lives, our businesses, the economy, and the wider world. Perhaps risk registers now need to incorporate the more outlandish threats that could potentially derail a business, and companies need to be prepared to spend money on it before it actually happens?
“There is no such thing as a zero-tolerance approach to risk,” adds Callum. “We need to be much more mature in our conversations about risk and understand that there is risk involved in any decision that we might make. The game is around trying to choose the most preferable decision based on clarity around the facts and how much risk is involved. When everyone is motivated enough (as we saw during the pandemic), we can include risk in decision making. We then need to maintain that sense of motivation when we get back into business-as-usual mode.”
Know your place
For risk management to be effective, you need to understand the context in which you are operating. Ruth Denyer, Director, Production Health and Safety at Netflix and co-president of IIRSM, says risk management is “only effective if the people looking at risk understand the business they are in, how its governance works, and the wider business scenario in which it operates.” Ruth advises risk management professionals to be curious about where safety and risk management fit within their business, what success for the business looks like, and how they can help support that.
“One of my most important learnings over the past 20 years,” she says, “is understanding how to adapt your language to the business you are in, so they understand you. You can sit in a room of health and safety professionals and they’ll all understand you, but the way you influence your organisation is to talk their language in a way that fits their sector. You need to understand your context.”
Greater integration of risk management within overall business strategy is therefore likely to be a trend over the next few years. Risk management will no longer be seen as a separate function, but an integral part of overall business strategy. This will involve embedding risk management processes and tools into all aspects of the organisation, from strategic planning to day-to-day operations.
What’s next? A gaze into the crystal ball
Callum adds that you have to think about the bigger picture as well. What are the wider trends that are affecting your business, now and in the future? What are the wider trends affecting the world in which we live, and how might they filter down into your working environment? How might social media affect your business – for good and bad? People entering the world of work now are much less sensitive about playing by the conventional rules and are much more willing to be vocal and share their opinions. How can you mitigate that risk?
Risk management professionals need to start to put greater emphasis on sustainability and social responsibility. As organisations become more aware of their impact on the environment and society, risk management will increasingly focus on identifying and mitigating risks related to climate change, social inequality, social unrest, and other sustainability issues.
With the widespread availability of data and advanced analytics tools, risk management will increasingly rely on data-driven insights to identify and mitigate risks such as these. Predictive analytics can help identify potential risks before they occur and use real-time monitoring to detect and respond to emerging threats. It is then up to the risk management professional to determine the best course of action for their organisation.
The NEBOSH IIRSM Certificate in Managing Risk is designed for anyone who wants to be able to identify, evaluate, and manage organisational risks and understand their impacts. It is particularly relevant for risk professionals looking to gain a broader view of risk beyond a specialism such as health and safety, quality, or business continuity. For more information about the qualifications visit: www.nebosh.org.uk/iirsmrisk
Some of the advice in this article is taken from the NEBOSH Alumni: The Future of Risk Management webinar. You can watch the full video at: https://youtu.be/Jbq3UYdea58
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