Charles (“Bud”) Schrock is passionate about organizational performance. He is, by his nature, skeptical and deeply curious. This caused him to wonder why organizations were not seriously embracing something as intuitively beneficial as “risk management” — even after it became the management tool du jour around 2004.
The answer, he believed, was simple. The new and trendy “Enterprise Risk Management” had very little in common with the practical aspects of actually managing risks. There were too many consultants selling ill-considered ERM methodologies, and savvy executives knew it. The problem with most of these “ERM” solutions was two-fold:
- “ERM” did not deliver actionable information
- “ERM” was separate from the real culture of the organization
Bud Schrock knew, from experience, that high performing organizations do manage risk. So how was their approach different from most of the current flavors of Enterprise Risk Management?
He observed that risk management, as effective leaders think of it, is a skill for recognizing problems and being prepared to take swift, responsive action when risk events arise. It is a skill that virtually every employee possesses to some degree. In that sense, it is similar to other management skills – like delegating and motivating. Such skills can be enhanced through training and reinforcement. When employees have a deep and ingrained understanding of these skills, overall organizational performance improves. It is the same for risk management – except that risk management’s impact on the organization is typically far greater.
The key is to teach and reinforce a practical approach to risk management. So he created these teaching points for managing risk – what to do, how to do it, and most importantly why it makes sense. But that was not the end. It soon became obvious that risk management is most effective when it is an integrated part of an entire performance culture.
He found that risk management skills can improve the entire management culture, including strategy development, governance and oversight, delegation, development of key performance indicators, strategic execution, and measurement of strategic results. All of these activities are more effective when they work as a coordinated whole. Teams can create better strategies when they can identify potential risk events. The more complete and concrete the strategy, the easier it is to effectively delegate assignments. Certain delegated activities could have a profound impact upon the success of top level strategies and should be closely monitored. Critical activities should have clear key performance indicators which are tracked and reported. And so on. A solid understanding of risk management, when integrated properly, becomes the glue that binds together a culture of high performance. This is the essence of Opportunity Management (formerly called “Performance Risk Management”). It is an integrated skill set for a high performing organization that can be taught and reinforced at every level of the organization.
Opportunity Management also provides a transparent approach to the real risk management question – which strategies and processes are subject to a growing risk of failure? And where should the management team focus its attention? The answers to those questions provide real value to your executives and managing board. And Opportunity Management delivers exactly those answers.
He is a CPA, CIA, and CRMA.
- Deep experience working with Boards and Executive Management as Chief Audit Executive and Chief Risk Officer.
- Published author, blogger, and commentator on risk management and internal audit.
- Product positioning, sales support, and sales presentations for both professional services firms and technology firms.
- Clinical Professor of Risk Management – DePaul University (2013 – Present)
- Internal Audit Education Partnership Advisory Board Member – DePaul University (2013 – Present)
- Board of Advisors – Thomson Reuters Internal Auditing (2014 – Present)
- Developer of the Opportunity Management Framework and associated tools
- Opportunity Management is a comprehensive results-focused performance and risk management framework.
- Opportunity Management Tracker is a cloud-based governance application for mid-size organizations.
- Performance Risk Management for Auditors…..
Thomson Reuters Internal Auditing 28, no. 3 (2013) 13-16
- Auditing Reputation Risk
Thomson Reuters Internal Auditing 29, no. 1 (2014) 30-35
- Four Part Series on Risk Management for the Chief Audit Executive:
Risk Management is a Key Operating Activity
Thomson Reuters Internal Auditing 29, no. 4 (2014) 15-20
Understanding the Risk Management Environment: Common Success Factors
Thomson Reuters Internal Auditing 30, no. 1 (2015) 13-19
Strategy, Risk, and Results: The Focus of the (Strategic) Internal Auditor
Thomson Reuters Internal Auditing 30, no. 5 (2015) 16-20
Using a Risk Management Framework for Internal Audit
Thomson Reuters Internal Auditing 31, no. 3 (2016) 29-34
Other articles published in Clifton Gunderson’s Relationships; Grant Thornton’s Currency; Hoosier Banker Magazine; Illinois Banker Magazine; Community Bankers Association of Illinois.
You can contact Bud at +1.630.446.0283 or send him an email at email@example.com.
Bud is a big fan of Risk Leader.