Systemic Risk Mitigation
A major component and consideration for any organizational activity is risk management. Historically, field operations risk management focused on HSSE. After the incidents of 2010 and 2011, that model has been reevaluated to include field operations as well as the ecosystem that enables these operational activities
For example, several years ago we extended the traditional risk management business model to more fully embrace operations. This recognizes that in some
ways the organization is at greater risk from operations than from other activities such as finance and procurement with the possible exception of cyber security etc.
Enterprise Risk Management must include all aspects of the enterprise. Moreover, it must be systemic by nature as it must extend well beyond the walls of the organization to include all aspects of the ecosystem. It must be more robust than simply part of vendor selection and supply chain management.
Neither the Bain OE construct or the Attaining & Sustaining Operational Excellence: A Best Practice Implementation Model described herein specifically name risk as a separate item. Risk Management is not just implied, it is part of the very fabric of OE.
Risk Governance Model: Operational Focus
RRI has developed a comprehensive risk mitigation model for OE that extends the COSO Enterprise Risk Management Integrated Framework. Several risk governance key components include: