Using the LTRC Risk Management
Performance Ladder
Liz Taylor
LIZ TAYLOR RISK CONSULTING
Performance ladder based on EFQM Model
The EFQM model for risk management is;
– A framework for helping management
manage ...
Risk Management and EFQM
How should it be used?
• It can be used for;
– Self assessment
– Benchmarking your organisations performance in
RM against...
Let’s look at it in detail
Framework divided into two areas; capabilities
and results
Leadership
Strategies
&
Policies
Peo...
The detail
Framework measured on four scales
Level 1 Awareness and understanding
Level 2 implementation in progress for al...
Risk Leadership
• Sets style for culture of risk management
• Sets out the leadership style whether
managing status quo or...
Risk Leadership
Level 1
Awareness and
understanding
Top management are aware of need to manage uncertainty & risk &
have m...
Strategy & Policies
Sets out
– The overt statement of risk leadership
– The resources behind managing risk
– Roles and res...
Strategy and Policies
Level 1
Awareness and
understanding
Policies & strategies are reviewed against risk principles.
Leve...
People
Sets out the measurements for developing people
in the organisation who will manage and embed
risk management.
People
Level 1
Awareness and
understanding
Key people are aware of need to assess & manage risks & understand
risk concept...
Partnerships and resources
This is about managing partnerships and resources
such as
– How external partnerships are manag...
Partnerships and resources
Level 1
Awareness and
understanding
Key people are aware of areas of potential risks with partn...
Risk Management processes
This is the actual way in which risk management
is implemented including
– The framework (at Boa...
Risk Management processes
Level 1
Awareness and
understanding
Some stand-alone risk processes have been identified.
Level ...
Risk Handling
This is the framework in which risk management
effectiveness is measured such as
– Audits of application of ...
Risk Handling
Level 1
Awareness and
understanding
No clear evidence that risk management is being effective.
Level 2
imple...
Results
This is the output from risk management such as
– Fewer risks and lower impact risks are occurring
– Value for mon...
Results
Level 1
Awareness and
understanding
No clear evidence of improved outcomes or any opportunities
identified.
Level ...
Embedding an Effective Risk Management Framework
The Performance Ladder
Capabilities Results
Level4
Excellentcapabilityest...
Liz Taylor FIRM, FBCI, Chartered Insurance Practitioner
Managing Partner
 
LIZ TAYLOR RISK CONSULTING
PO Box 340
Newton Ab...
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LTRC Performance Ladder

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This is a performance ladder or framework for Enterprise Risk Management. It can be used as an audit tool, a maturity model, a benchmarking tool or a model for creating a plan of action.

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LTRC Performance Ladder

  1. 1. Using the LTRC Risk Management Performance Ladder Liz Taylor LIZ TAYLOR RISK CONSULTING
  2. 2. Performance ladder based on EFQM Model The EFQM model for risk management is; – A framework for helping management manage risks successfully – Helps to manage all aspects of Enterprise Risk Management – Is a balanced model showing inputs and outputs
  3. 3. Risk Management and EFQM
  4. 4. How should it be used? • It can be used for; – Self assessment – Benchmarking your organisations performance in RM against others – A tool for creating an action plan and developing RM further – A framework for creating a conversation about the way in which risk is managed
  5. 5. Let’s look at it in detail Framework divided into two areas; capabilities and results Leadership Strategies & Policies People Partner ships & resources process Risk Handling outcomes Capabilities Results
  6. 6. The detail Framework measured on four scales Level 1 Awareness and understanding Level 2 implementation in progress for all key areas Level 3 Embedding and improving Level 4 Excellent capability established
  7. 7. Risk Leadership • Sets style for culture of risk management • Sets out the leadership style whether managing status quo or through a change process • Helps to structure risk management within the organisation • Engages stakeholders
  8. 8. Risk Leadership Level 1 Awareness and understanding Top management are aware of need to manage uncertainty & risk & have made resources available to improve. Level 2 implementation in progress for all key areas Senior Managers act as role models and take the lead to ensure that approaches for addressing risk are being developed & implemented consistently & thoroughly across the organisation. Level 3 Embedding and improving Top-down commitment with embedding & integrating risk management as routine business practice. Senior Managers ensure that staff are suitably skilled to achieve continuous improvement. Level 4 Excellent capability established Senior Managers reinforce & sustain risk capability, organisational & business resilience & commitment to excellence. Leaders invited to speak about their success. There is strong support and reward from Senior Managers for seizing opportunities & for well managed risk taking.
  9. 9. Strategy & Policies Sets out – The overt statement of risk leadership – The resources behind managing risk – Roles and responsibilities for leading, managing, training, coaching, supporting, developing and auditing risk management – States risk appetite – The integration of risk management into • Programme and project management • Partnerships and contracts • Change management • Performance management • Business planning at all levels
  10. 10. Strategy and Policies Level 1 Awareness and understanding Policies & strategies are reviewed against risk principles. Level 2 implementation in progress for all key areas Risk management principles are being reflected in the organisation’s policies & strategies, communicated effectively & made to work through a framework of processes. Level 3 Embedding and improving Risk handling is inherent feature of all policies & strategy making processes. Overall risk appetite achieves balance between opportunities and threats. Level 4 Excellent capability established Risk management capability in policy & strategy making is reviewed and improved. Role model status.
  11. 11. People Sets out the measurements for developing people in the organisation who will manage and embed risk management.
  12. 12. People Level 1 Awareness and understanding Key people are aware of need to assess & manage risks & understand risk concepts & principles. Level 2 implementation in progress for all key area Core group of people have skills & knowledge to manage risk effectively. Suitable guidance is being made available & training programmes being implemented to develop risk capability. Level 3 Embedding and improving People encouraged & supported to be more innovative. Regular training is available for people to enhance their risk skills. CPD training in place for core group of people. Level 4 Excellent capability established All staff are risk aware & capable of using basic risk skills, tools & techniques. They feel empowered to take well managed risks. Core group of people are highly skilled in managing risk effectively. Specialised risk training an integral part of on-going personal development plans.
  13. 13. Partnerships and resources This is about managing partnerships and resources such as – How external partnerships are managed to minimise the risk to the organisation – Managing finance to manage risks – Management of building equipment and materials to manage risks – Management of technology – Management of information and knowledge
  14. 14. Partnerships and resources Level 1 Awareness and understanding Key people are aware of areas of potential risks with partnerships, suppliers & management of significant resources & understand the need to agree approaches to manage these risks. Level 2 implementation in progress for all key areas Risk with partners is being managed consistently for all key areas & across organisation. There are boundaries for managing assets & financial & other resources. Level 3 Embedding and improving Sound governance arrangements established; partners & suppliers selected on basis of risk capability & compatibility. Resources are well managed. Level 4 Excellent capability established Information integrity and asset security are assured. Financial and other resources are effectively managed. Organisation is regarded as a role model.
  15. 15. Risk Management processes This is the actual way in which risk management is implemented including – The framework (at Board level) – The systems (at senior management level) – The processes (at operational level)
  16. 16. Risk Management processes Level 1 Awareness and understanding Some stand-alone risk processes have been identified. Level 2 implementation in progress for all key areas Risk management processes being implemented in key areas. Risk capability self-assessment tools being used in some areas. Level 3 Embedding and improving Risk metrics are collected. Risk management standards applied in some areas. Staff accept risk management as standard requirement of good management. Level 4 Excellent capability established Management of risk & uncertainty is well integrated with all business processes. State-of-the-art tools & methods are used. Selected as a benchmark site by other organisations. Arrangements in place to identify opportunities which might be available if risks are well managed.
  17. 17. Risk Handling This is the framework in which risk management effectiveness is measured such as – Audits of application of process – Cross fertilisation of ideas – Peer review – Benchmarking
  18. 18. Risk Handling Level 1 Awareness and understanding No clear evidence that risk management is being effective. Level 2 implementation in progress for all key areas Some evidence that risk management is being effective in at least most relevant areas if not in all relevant areas. Level 3 Embedding and improving Clear evidence that risk management is being effective in all areas and that risk opportunities are being pursued. Level 4 Excellent capability established Excellent evidence that risk management is being highly effective in all areas & improvement is being pursued. Higher risk opportunities being successfully pursued.
  19. 19. Results This is the output from risk management such as – Fewer risks and lower impact risks are occurring – Value for money improved – Better innovation achieved – Culture is one of taking managed risk
  20. 20. Results Level 1 Awareness and understanding No clear evidence of improved outcomes or any opportunities identified. Level 2 implementation in progress for all key areas Some evidence of risk management contributing to improvement in outcome performance, demonstrated by measures including, where relevant, stakeholders’ perceptions and potential for new opportunities. Level 3 Embedding and improving Clear evidence of risk management contributing to significantly improved performance for all relevant outcomes, better value for money, showing positive & sustained improvement & new opportunity achievement. Level 4 Excellent capability established Excellent evidence of risk management contributing to markedly improved outcome performance, better value for money & new opportunity realisation, which compares favourably with other organisations employing best practice.
  21. 21. Embedding an Effective Risk Management Framework The Performance Ladder Capabilities Results Level4 Excellentcapabilityestablished Senior Managers reinforce & sustain risk capability, organisational & business resilience & commitment to excellence. Leaders invited to speak about their success. There is strong support and reward from Senior Managers for seizing opportunities & for well managed risk taking. Risk management capability in policy & strategy making is reviewed and improved. Role model status. All staff are risk aware & capable of using basic risk skills, tools & techniques. They feel empowered to take well managed risks. Core group of people are highly skilled in managing risk effectively. Specialised risk training an integral part of on-going personal development plans. Information integrity and asset security are assured. Financial and other resources are effectively managed. Organisation is regarded as a role model. Management of risk & uncertainty is well integrated with all business processes. State-of-the-art tools & methods are used. Selected as a benchmark site by other organisations. Arrangements in place to identify opportunities which might be available if risks are well managed. Excellent evidence that risk management is being highly effective in all areas & improvement is being pursued. Higher risk opportunities being successfully pursued. Excellent evidence of risk management contributing to markedly improved outcome performance, better value for money & new opportunity realisation, which compares favourably with other organisations employing best practice. Excellent Level3 Embedding& Improving Top-down commitment with embedding & integrating risk management as routine business practice. Senior Managers ensure that staff are suitably skilled to achieve continuous improvement. Risk handling is inherent feature of all policies & strategy making processes. Overall risk appetite achieves balance between opportunities and threats. People encouraged & supported to be more innovative. Regular training is available for people to enhance their risk skills. CPD training in place for core group of people. Sound governance arrangements established; partners & suppliers selected on basis of risk capability & compatibility. Resources are well managed. Risk metrics are collected. Risk management standards applied in some areas. Staff accept risk management as standard requirement of good management. Clear evidence that risk management is being effective in all areas and that risk opportunities are being pursued. Clear evidence of risk management contributing to significantly improved performance for all relevant outcomes, better value for money, showing positive & sustained improvement & new opportunity achievement. Good Level2 Implementationin progressforallkeyareas Senior Managers act as role models and take the lead to ensure that approaches for addressing risk are being developed & implemented consistently & thoroughly across the organisation. Risk management principles are being reflected in the organisation’s policies & strategies, communicated effectively & made to work through a framework of processes. Core group of people have skills & knowledge to manage risk effectively. Suitable guidance is being made available & training programmes being implemented to develop risk capability. Risk with partners is being managed consistently for all key areas & across organisation. There are boundaries for managing assets & financial & other resources. Risk management processes being implemented in key areas. Risk capability self-assessment tools being used in some areas. Some evidence that risk management is being effective in at least most relevant areas if not in all relevant areas. Some evidence of risk management contributing to improvement in outcome performance, demonstrated by measures including, where relevant, stakeholders’ perceptions and potential for new opportunities. Satis-factory Level1 Awareness& understanding Top management are aware of need to manage uncertainty & risk & have made resources available to improve. Policies & strategies are reviewed against risk principles. Key people are aware of need to assess & manage risks & understand risk concepts & principles. Key people are aware of areas of potential risks with partnerships, suppliers & management of significant resources & understand the need to agree approaches to manage these risks. Some stand-alone risk processes have been identified. No clear evidence that risk management is being effective. No clear evidence of improved outcomes or any opportunities identified. Unsatis-factory Risk Leadership Risk Strategy & Policies People Partnerships & Resources Risk Management Processes Risk Handling Outcomes
  22. 22. Liz Taylor FIRM, FBCI, Chartered Insurance Practitioner Managing Partner   LIZ TAYLOR RISK CONSULTING PO Box 340 Newton Abbot Devon TQ12 5ZX   e:         liz.taylor@liztaylorriskconsulting.co.uk t:          +44 (0) 1626 337626 m:        +44 (0) 775 3607676 f:          +44 (0) 1626 330557 w:         www.liztaylorriskconsulting.co.uk

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