Serhat Cicekoglu is the Director of Center for Risk Management and a Clinical Lecturer at Quinlan School of Business. He is a subject matter expert on Risk and Innovation Management with over 20 years of industry experience serving corporations in Consumer Electronics, Semiconductor, Consumer Goods, and Industrial Products sectors. His areas of expertise include Corporate Strategy Planning, Corporate Venturing, M&A, and New Product and Service Development. For more information on Serhat, click here.
Christopher Skroupa: Enterprise Risk Management (ERM) has been recognized as an important idea in terms of corporate decision making for some time now. However, would you say that the focus of this idea is changing due to our ever more-connected world?
Serhat Cicekoglu: I would. Corporations are realizing that making proactive steps in this field is absolutely essential to long-term growth. The idea of ERM is expanding to cover a much more diverse range of issues, which means that successful executives are realizing these changes and integrating them into decision making. The nature of the modern interconnected economy has given executives greater opportunities for growth than ever before, at the cost of a whole new range of risks and issues that need to be addressed.
Skroupa: What steps do organizations need to take in order to address these risks?
Cicekoglu: The nature and breadth of these issues will force organizations to adopt an entirely new perspective on ERM, and these responsibilities can no longer be handled by executives. Rather, these values must be developed and adopted at an enterprise level and practiced on the daily basis. Organizations can no longer be seen as rigid entities solely dependent on innovation. These issues must be handled in regard to the relations between its interconnected systems of innovation, supply, talent, etc. In other words, a static approach to this dynamic issue is a huge threat to corporate sustainability.
Skroupa: How does an organization choose what types of risks are worth taking?
Cicekoglu: Before deciding what risks are worth taking, the values of that organization must be agreed upon and adopted by all levels. These values will provide the organization with direction, upon which decisions can be made that are in line with its abilities and resources. Organizations must also assess its talent. Before taking a risk, has an organization considered and analyzed the abilities of its talent, and given it the proper tools and information that it will need to deal with challenges faced by the organization?
Skroupa: What role does consistency play in ERM?
Cicekoglu: As important as consistency is in ERM, it is typically underestimated as good practice. Corporations often stray from certain processes before they have had time to come to full understanding. Simply put: inconsistent practices lead to inconsistent results. Inconsistency in this area can affect an organization’s ability to make informed, wise decisions. This means that an organization with an inconsistency problem will have a hard time analyzing and responding to complex opportunities, which would otherwise be seen as fruitful and maneuverable.
Skroupa: How would you summarize the effects of a successful ERM program?
Cicekoglu: No ERM program is perfect. Managers know that sometimes unforeseen monkey-wrenches can be thrown into well-oiled machines. However, businesses with successful ERM programs have the advantage over competition of increased resilience. Often, the ability of an organization to make wise decisions on healthy risks separates the organizations who survive competition from those who do not.
On October 14, 2014 , The Loyola University Chicago, Quinlan School of Business, Center for Risk Management Executive Dialogue Series will host its first in a series of seminars on Resilience—Big Data and Cyber Security. Join Serhat Cicekoglu and a select group of 25-35 internationally renowned experts on Resilience: Big Data and Cyber Security October 14, 2014. To inquire about attending contact email@example.com.
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