M&M candies are universally loved and enjoyed. Years ago, their catchphrase was “Melts in your mouth, not in your hands.” The protective shell insured that the inner chocolate would not soften in the warmth of your hands.
Enterprise Risk Management applies a protective cover, at multiple levels, that works to detect, deflect, and defend against all perils that move toward your firm. The vulnerable center is what you want to protect most of all: the firm’s value.
The entire organization is moving towards a reward, usually in the form of capturing opportunities that turn into revenue and growth or another important result. However, in addition to the costs associated with opportunity, there are risks all around you. Risks originate from many sources such as:
– The status quo,
– The unknown, and
– Just being in existence.
Your risks could harm firm value. Your Enterprise Risk Management culture and methodology works to deflect, defer, and minimize most of the risks. While some of the risks will break through this protective shell, your organization is strong enough to deal with those few risks that get past the Enterprise Risk Management structure.
Enterprise Risk Management is designed to be just like an M&M with the hard shell, providing a protective coating to the core, which is your firm’s value.