Risk Management is More than just Seeing Around the Corners

As Eric Lamarre  and Martin Pergler wisely suggest in the current McKinsey Quarterly, “unknown and unforeseeable risks will always be with us, and not even the best risk assessment approach can identify all of them.”  

 

No one can argue with that reality. Unpredictable waves of change, including competitive challenges, economic fluctuations, and even seemingly-unrelated global and regional events, can wreak havoc with the best-designed methods and strategies. And yet, there is a way to address unforeseen events before they occur.

 

Companies are beginning to implement a strategy for managing their strategic knowledge resources by deploying a platform for real-time change management that captures and connects their internal intellectual capital with best practice and early event detection in the field. The system allows virtually instantaneous, iterative and increasingly targeted response to bracket the organization’s response to new events and circumstances.

 

This “real-time change management” infrastructure works on the same principles as stabilizer systems on cruise ships. Since it is not possible to predict the speed and direction of each oncoming wave, the ships deploy a set of “wings” under the hull that are activated by a gyroscope. When the ship encounters an unexpected wave the stabilizer immediately responds by moving the underwater blades laterally and horizontally in the opposite direction, thereby neutralizing the impact of the wave and smoothing the motion.

 

The corporate version of this system is referred to as an “eWorking” platform. It is capable of detecting unexpected waves of change and quickly responding to them in much the same way. The power of such a system is that it can immediately activate strategies—knowledge and tools—supporting a company’s front-line knowledge warriors. This higher level of adaptability represents a big departure from the stable, static knowledge and learning systems that we find in most corporations. Much of the intellectual capital of a company is locked up inside static systems that were built for stability. But as Lamarre and Pergler point out, these days adaptability trumps stability. Thomas Friedman takes it a step further, suggesting that economic stability will actually cause companies to fall farther behind, whereas rugged, adaptable entrepreneurs and the systems that support them will be empowered.

 

LeveragePoint Innovations recently assisted one of the world’s largest CPG companies in creating a responsive eWorking pilot that evolves itself by linking its knowledge resources to the people that use them in a two-way flow, resulting in real-time iteration and almost instantaneous response to the front-line where their marketing methods are being tested by changing conditions on a daily basis. The solution was iterated three times in as many months, each time responding to user needs and refined understanding about its actual use. The result of this new platform was an estimated 21X ROI and a decision to deploy the solution globally.

 

This is the platform that supports the LeveragePoint for Value Management suite of products. It allows marketers to respond quickly to the changing competitive landscape and to other environmental changes that reset the value of your product.  It is not possible to predict every new and changing circumstance, but it is possible to respond to the unpredictable waves of change with an adaptable system that can turn on a dime. Such a solution provides a complimentary adjunct to the process of stretching corporate vision to see around the next corner, and a way of activating that vision.

 

Jonathon Levy

Chief Strategy Officer