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SoluxR- The Uncertainty Continuum
1. The document discusses reimagining risk governance in an increasingly uncertain world using the "uncertainty continuum" model. It presents the uncertainty continuum as ranging from measurable risks where probabilities can be estimated, to unmeasurable risks where likelihoods cannot be confidently estimated. 2. Along the continuum are three levels of decision-making - preservation focused on compliance, performance focused on short-term objectives, and strategic focused on long-term value creation. The appropriate level of decision-making depends on an organization's position along the uncertainty continuum. 3. Fundamental blocks of risk governance are discussed including purpose, alignment, communication, and transparency. Techniques like crowdsourcing, automation, and visualization are presented for reimag
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SoluxR- The Uncertainty Continuum
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- 3. 3 COVID-19 Turning Point DigitalFirst Vs Digital Available Complex Adaptive Systems increasing risk blindness Environmental Crisis: Driving ESG Mainstream The Q Spot Quantum Risks: Risks which exist in different states simultaneously across systems even though they cannot be observed together Q
- 4. 4 Risk Governance “Navigating True Northin a Disordered World Growing in Uncertainty” Dead Reckoning: Risk Governance Instrumentation is Poor: ability to see what’s around the corner is poor, 01. Disorder: “We won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress (at today’s rate) … must focus on decreasing downsides whilst limiting massive upside to smaller bets 02. The Uncertainty Continuum: (Value-Objectives- Time): Decision Making at the top of the continuum morphs into decision management in the middle and decision taking at the bottom 03.
- 5. 5 Risk Governance Fundamental BuildingBlocks Purpose: North Star influencing day to day decision making Alignment: Purpose, Values (Doing the Right Things) and Objectives Communications: Open across organisational silos & functions Transparency: Open collaboration. Getting information from the people who have it to the people who need it Strategos ‘Art of the General’ (PACT) FinTechs have reimagined customer banking experiences. Others have reimagined customer buying and travel experiences. So too should Risk Customer experiences be reimagined. Reimagined Risk Principles: • Relevance, • Ease, • Speed, • Value Digitialisation: Reimagining Risk Principles Using natural language processing, text mining and AI: • Crowdsource: wisdom of the crowd/cognitive diversity & cognitive leaps • Automation & AIs, get insights and foresights of what’s around the corner • Integrate with static data. Use crowd G2 to find the needles in the haystack • Visualisation & Collaboration AIs & AI Powered Technologies
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- 7. 7 SoluxR ‘s SmartRisk Automation Capture Data Automate Risk Visualise Crowdsource Existing Static Data
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- 9. 9 © Board RisksDecisions Systems Limited T/A SoluxR 2021. All rights reserved.
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- 11. 11 Uncertainty Continuum Value Preservation Compliance &Prevention Objectives Operational Leadership Decision Making Value Creation Value Challenges Across all Capitals: Financial, Social/Relationship/ Reputational, IP, Human, Natural. Time, Challenges Pace of Disruption, Interconnections, Interdependencies' Strategic Leadership Decision Making Operating Performance Objectives Stakeholder Purpose Objectives
- 12. 12 Uncertainty Continuum Value Preservation Compliance &Prevention Objectives Operational Leadership Decision Making Value Creation Value Challenges Across all Capitals: Financial, Social/Relationship/ Reputational, IP, Human, Natural. Time, Challenges Pace of Disruption, Interconnections, Interdependencies' Strategic Leadership Decision Making Operating Performance Objectives Stakeholder Purpose Objectives • Excellence/Quality • Systems Compliance • Regulatory Compliance Preservation Decision Making Day-to-Day
- 13. 13 Uncertainty Continuum Value Preservation Compliance &Prevention Objectives Operational Leadership Decision Making Value Creation Value Challenges Across all Capitals: Financial, Social/Relationship/ Reputational, IP, Human, Natural. Time, Challenges Pace of Disruption, Interconnections, Interdependencies' Strategic Leadership Decision Making Operating Performance Objectives Stakeholder Purpose Objectives Preservation Posture • Business Issues • Margin Management • ESG-Impacts • Continuity Operations Performance Decision Making The Short-Term
- 14. 14 Uncertainty Continuum Value Preservation Compliance &Prevention Objectives Operational Leadership Decision Making Value Creation Value Challenges Across all Capitals: Financial, Social/Relationship/ Reputational, IP, Human, Natural. Time, Challenges Pace of Disruption, Interconnections, Interdependencies' Strategic Leadership Decision Making Operating Performance Objectives Stakeholder Purpose Objectives Preservation Posture Performance Posture • Strategic Objectives • Investment & Return • Capital Allocation • ESG-Impacts Performance Decision Making The Long-Term
- 15. 15 Uncertainty Continuum Value Preservation Compliance &Prevention Objectives Operational Leadership Decision Making Value Creation Value Challenges Across all Capitals: Financial, Social/Relationship/ Reputational, IP, Human, Natural. Time, Challenges Pace of Disruption, Interconnections, Interdependencies' Strategic Leadership Decision Making Operating Performance Objectives Stakeholder Purpose Objectives Preservation Decision Making Performance Decision Making Strategic Decision Making Value Creation Unmeasurable Uncertainties • Proactive • Offensive • Small (Unstructured) Data Value Preservation Measurable Uncertainties • Traditional • Defensive • Big (Structured) Data Likelihood can no longer be confidently estimated using traditional methods Probability and then Likelihood can be estimated using traditional methods
- 16. 16 Uncertainty Continuum Likelihood canno longer be confidently estimated using traditional methods Probability and then Likelihood can be estimated using traditional methods Value Preservation Compliance & Prevention Objectives Operational Leadership Decision Making Value Creation Value Challenges Across all Capitals: Financial, Social/Relationship/ Reputational, IP, Human, Natural. Time, Challenges Pace of Disruption, Interconnections, Interdependencies' Strategic Leadership Decision Making Operating Performance Objectives Stakeholder Purpose Objectives Performance Posture Strategic Posture Preservation Posture Purpose Data & Decisions Strategy(s) Business Model Capitals Deployed Outcomes Value Creation • Quantum Risks • Proactive • Offensive • Small (Unstructured) Data Value Preservation • Measurable & Unmeasurable Uncertainties • Traditional • Defensive • Big (Structured) Data
- 17. 17 References • Chief ValueOfficer: Accountants Can Save the Planet • Accounting for Value Creation and Encouraging the Rise of the Chief Value Officer Risk Governance in a Disordered World Growing in Uncertainty: The Uncertainty Continuum: Reimagining Risk Agile Risk • Medium https://peadar-duffy.medium.com/ • LinkedIn Peadar Duffy • YouTube • WWW www.soluxr.com • ISO 37000 (Governance of Organisations) • ISO 31000 (Risk Management 2018)