Page 69 - IRMSA Risk Report 2021

3. DYNAMIC PLANNING

REPLACING THE TRADITIONAL PLANNING CYCLE WITH A DYNAMIC ONE
Extreme uncertainty on a global scale is rare. However, existential crises at organisation- or community-level are more frequent,
providing lessons concerning which operating models succeed and fail during periods of uncertainty. As traditional annual planning
cycles are disrupted and undermined, the competence to plan dynamically and adjust quickly must emerge. If we find ourselves
moving from one reporting cycle to another or one board cycle to another, the organisation is going to be in trouble.

SCENARIOS

The competence to develop and use scenarios and war-gaming techniques is essential in times of extreme uncertainty. To enable
organisations to develop scenarios to explore different futures, Boards, C-Suite Executives and Risk Managers should develop
competence in the areas depicted below.

Separating
Gathering data to certainties from
Defining the issue identify the key uncertainties in Using the scenarios
to be solved; the factors, trends, volatile economic to aid your planning
goal to be achieved; and uncertainties conditions and and decision-
or the decision to that may affect the deciding which making process
be made. above issue, goal, or of these to use
decision. to develop your
scenarios.

PRIORITISATION

We cannot do everything about all things that may affect our business. In the end, we have limited resources with which we can
only control so much. The ability to prioritise, given the pace and the nature of change and choosing between conflicting demands
on resources, is a prime motivator for a robust risk management process with embedded decision-making capability.

4. AGILITY IN ADAPTING AND RESPONDING
IDENTIFYING AND RESPONDING TO RISKS FROM OUTSIDE

When making decisions concerning risks coming from outside the organisation, the only thing an organisation can control is how
to react to things that are out of their control. This presupposes a good system in place to track and identify risks coming from
outside the organisation. This is an important capability and an opportunity for risk and strategy to tie in resources/competence in
how best to track the external environment.

FINDING NEW WAYS OF WORKING

Managers must become competent at working in a dynamic environment of extreme uncertainty. They must know what they need
and develop the flexibility and capability to act collectively, quickly, and across the whole organisation as challenges arise.

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