Blog

Overview of the 5 Types of Strategic Risk

Strategic planning is a fascinating and complicated process. There is no “correct” way to create a strategic plan; every leadership team has a unique definition of where the company is going or how you’ll get there.

While this wide range of options allows for tremendous latitude and flexibility, a company’s planning process can be TOO easygoing. It’s a bit like having a body with all the bones connected (immobilized) and one that has no bones at all (a bowl of jelly). Both extremes — too rigid or too relaxed — make it easier for threats to creep in and destroy what you’ve worked so hard to create.

Most organizations use a Strategic Plan (though certainly not all, in my experience). And most plans define the company’s Vision, Mission, Values, Objectives, and Measures — which I abbreviate as VMVOM.

But while a plan can look great on paper, most strategic plans do not consider strategic risks.

In this post, I’ll review 5 types of risks specific to the strategic planning process, and which one I believe is the most critical to organizational growth.

Continue reading “Overview of the 5 Types of Strategic Risk”

What is Strategic Risk, and Why Does It Matter?

When you hear the word “risk,” you probably think of either something dangerous (“don’t do that, you could get hurt!”), or an action that is likely to fail (“if this works out, we’ll be rich; if not, we could lose everything”). But risks are actually neutral; they’re neither good nor bad, but simply describe a degree of uncertainty.

We tend to say that risks are either “positive” or “negative.” But what we’re actually describing is the outcome. If a risk brings a positive outcome, we might enjoy new opportunities and pleasant surprises. If a risk brings a negative outcome, we could experience damage, injury, liability, or loss.

The factors that contribute to outcomes are called threats. Although most threats can’t be eliminated (such as consumer purchase habits, economic instability, and increasing reliance on technology), we can definitely reduce the chance that we will suffer from a negative outcome.

I’m passionate about helping leaders to recognize vulnerabilities in their organization: areas where an attack or loss is likely to occur. In this article, I explain the importance of developing your awareness of risks in a strategic context, the “perfect blend” of strategy and risk, and suggestions for managing them.

Continue reading “What is Strategic Risk, and Why Does It Matter?”

Yin and Yang Approaches to Management

Balance is very difficult for leaders. When things go wrong, many of us find it hard to stay calm, cool, and collected.

Leaders are expected to meet objectives, yet also be approachable. To maintain control, but welcome differing opinions. To motivate staff, yet manage ongoing risks.

A few years ago, I was hired as director at a healthcare facility in Minnesota. It was a perfect fit for my experience and training. The leadership team was encouraging, as were the members of my department. And I really loved being in a long-term care environment.

But despite all the support, I found myself increasingly stressed and anxious. The problem wasn’t just the high-pressure environment; instead, it was a battle happening in my mind. As an introvert, I do my best work in periods of silence and reflection. My information-gathering process is intuitive, because I rely on connections between things that are not obvious to others. Rather than following a specific pathway, I look for hidden clues and investigate the root causes of problems. My process may be unconventional, but it gets results.

Unfortunately, executive roles typically do not welcome an intuitive thinking process. And this clash — between my natural temperament, and a system that rewards fast and decisive action — resulted in a very high-stress environment.

I wondered:

Why was it so difficult for intuitive leaders to fit the mold of traditional corporate thinking?

and

Is it possible to find a balanced leadership style?

Continue reading “Yin and Yang Approaches to Management”

The Two Precursors to Meaning

Don’t you hate it when you’re having a conversation with someone, and suddenly you realize that you’re on totally different wavelengths? Let’s say we’re discussing your upcoming change management project, and you have been explaining the framework that will be needed to increase your warehouse’s production output. How would you feel if I respond with a completely unrelated topic: “Frameworks are incredibly useful! Which method do you prefer: the ADKAR, SWOT, or PESTEL?” Continue reading “The Two Precursors to Meaning”

Are You Using This Essential Risk Management Tool?

Strategic risk management is the process of identifying, analyzing, and controlling uncertainties that keep an organization from achieving its objectives. Of the many tools available to increase your strategic risk intelligence—such as a root-cause analysis or a workflow diagram—one is especially useful. It’s simple but often overlooked: the humble dictionary.

Continue reading “Are You Using This Essential Risk Management Tool?”

Perspective Shifts and My (New) Irish Heritage

March 17 is an American holiday to commemorate St. Patrick, the patron saint of Ireland. Although not originally celebrated in Ireland, this day became important to Irish immigrants as a way to remember their heritage.

Happy St Patricks Day
And it’s one that I have never celebrated. Until today.

As with most oral family histories, mine was shared by relatives who spent time digging through genealogical records. I knew that my Dad’s side was German and English, and my Mom’s side was mostly English (my Grandmother was a descendant of the first King of England, Egbert of Wessex). That’s where my identity ended. Mostly English, with a German surname from my Dad’s side.

Continue reading “Perspective Shifts and My (New) Irish Heritage”