Establish a Data-Driven Risk Management Approach in Three Steps

Trying to gain an edge in their markets, teams continue to push the envelope in terms of speed and efficiency. As they seek to streamline operations and quickly adapt to evolving landscapes, however, these teams often overlook one key element that can make or break the realization of their most strategic aspirations: risk management.

Today, teams can’t afford to take a tactical approach to risk or pretend that risk doesn’t exist. They need to establish a method centered on effective, data-driven risk management. Here are three key steps teams need to take to minimize risk:

• Uncover risks and dependencies early. Teams need to establish a unified, 360-degree view of data across value streams. Without this holistic view, teams won’t be able to identify dependencies and potential risks before they escalate into major problems.
• Implement risk-aware decision-making processes. It is essential to integrate risk considerations into strategic planning, resource allocation, and prioritization, including across products, projects, investments, and portfolios. Managers can’t make informed choices that balance potential risks and rewards without first establishing a data-driven risk management approach.
• Leverage accurate investment performance data. Lacking accurate, concrete data, teams can’t make informed decisions about resource allocation, work prioritization, risk avoidance, and process improvement. On the other hand, by improving the accuracy of investment performance data, leaders can make better decisions that boost value and fuel growth, while mitigating risk.

To address these requirements, Value Stream Management (VSM) represents a crucial approach. VSM is a framework for optimizing the flow of value across an entire organization.

By taking a holistic, proactive approach to risk management, teams can address potential issues before they escalate into major setbacks. An effective VSM and risk management approach also enables groups to gain a unified perspective across the entire value stream, empowering users to identify risks beyond team boundaries.

Cox Automotive mitigates risk

Cox Automotive is a global leader in the automotive industry. The company had evolved through 67 acquisitions. These acquisitions resulted in a very complex technology landscape that introduced overlapping data sets and significant blind spots in managing products and services. This complexity impeded operations, collaboration, and product delivery, while introducing substantial risks associated with change and disruption.

Leaders at Cox Automotive recognized that mitigating these risks was imperative if their organization was to succeed in its transformation journey. To address these challenges, the team at Cox Automotive turned to ValueOps by Broadcom.

Cox Automotive’s ValueOps implementation yielded streamlined operations, improved efficiency, and enhanced risk management. Their data-driven and agile approach not only enhanced product delivery but also ensured that potential risks were mitigated. Their transformation journey serves as a compelling example of how an organization can proactively minimize risks and achieve operational excellence.

Conclusion

In today’s organizations, teams are trying to move quickly to bring new products and services to market. By organizing teams around value streams and eliminating data silos, companies can minimize risk while boosting agility. To learn more, be sure to download our white paper, Minimize Organizational Risk. This paper offers an in-depth look at the challenges teams confront in managing risk, and it provides a detailed look at the strategies and solutions that can help teams overcome these challenges.