By Ron Ostrowski (revised November By Ron Ostrowski (revised November 2015)2015) 11

Risk Management & Organisational Change

Presented by Ron Ostrowski

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What is Risk Management?What is Risk Management?The The International Organisation for Standardisation defines Risk as:defines Risk as:“… “… the effect of uncertainty on the effect of uncertainty on objectivesobjectives (whether positive or (whether positive or negative)”.negative)”.

The The Business DictionaryBusiness Dictionary defines defines Risk Management as:Risk Management as:““Policies, , procedures, and , and practices involved in identification, involved in identification, analysis, , assessment, , control, and , and avoidance, , minimization, or elimination of minimization, or elimination of unacceptable unacceptable risks”.”.

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Risks for Change InterventionsRisks for Change Interventions

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Each change intervention has its own set of risks, however, some common risks could include:

– risk of operational disruption– risk of employment law breaches– risk of anti-discrimination law beaches– risk of not aligning with organisational objectives– risk of cost blowouts– risk of non-acceptance by stakeholders – risk of stakeholder sabotage

By Ron Ostrowski (revised November By Ron Ostrowski (revised November 2015)2015) 33

Trauma of Change is a Big RiskTrauma of Change is a Big RiskOne serious risk is losing good staff through poor communication, which fails allay the fear of change.

By Ron Ostrowski (revised November By Ron Ostrowski (revised November 2015)2015) 44

What is Risk Management?What is Risk Management?

It is an It is an iterative iterative processprocess that, with that, with each cycle, can each cycle, can contribute contribute progressively to progressively to organisational organisational improvement by improvement by providing management providing management with a greater insight with a greater insight into risks and their into risks and their impact.impact.

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Risk ManagementRisk Management

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Identify the risks • What are the changes in the environment? • What are the risks which can arise? Establish the causes • Do the risks come from outside? If yes, where? • Do the risks come from inside? If yes, in what process?

• What are the causes of the risks in the processes?

By Ron Ostrowski (revised November By Ron Ostrowski (revised November 2015)2015) 66

Risk AnalysisRisk Analysis

Identify the risks by:1. Identifying the causes2. Identifying the controls3. Establishing likelihood and

consequence descriptor4. Establish risk rating descriptors5. Adding other controls6. Making decisions on the way

forward7. Monitoring and reviewing

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Source: Southern Cross University - February 2010.

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““Risk analysis is best done in a group with each member of the group Risk analysis is best done in a group with each member of the group having a good understanding of the tasks and objectives of the area being having a good understanding of the tasks and objectives of the area being analysed”. analysed”.

By Ron Ostrowski (revised November By Ron Ostrowski (revised November 2015)2015)

Risk ManagementRisk Management

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Measure the risks • What is the importance of the risks?

• What is the probability that they occur?

• What is the level of acceptable risk?

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Risk ManagementRisk Management

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Develop controlsFor the unverifiable risks: • Should the risks be rejected by ceasing the activities

which allowed to identify them? For the controllable risks: • Can they be transferred to another party? • Is there a process to control them?

If yes, do the processes of control operate effectively? How do they compare with the best practices? If not, of what is required to reduce the risks to an acceptable level?

By Ron Ostrowski (revised November By Ron Ostrowski (revised November 2015)2015) 99