With ERM, risk management is everyone's responsibility. (Photo: Shutterstock) Risk management must be a part of everycritical decision throughout the organization. (Photo:Shutterstock)

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Success these days depends on your ability to immediately graspall of your current risks, anticipate what's around thecorner, and understand what it means for the organization. Andthere's no room for error.

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An enterprise risk management (ERM) program can help you makesmart decisions about risk that will put you onthe path toward success. ERM collectively looks at all risks, howthey relate to each other, and the cumulative impact on theorganization. It looks to increase an organization's value by bothminimizing losses and maximizing opportunities for growth.

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Advances in technology are making it easier than ever to managerisks at an enterprise level. But technology alone is not theanswer. For ERM to be successful, you have to cultivate a riskculture.

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Risk management must be a part of every critical decisionthroughout the organization. People at all levels and functionsmust not only understand the organization's approach to riskbut take personal responsibility for managing risk in theireveryday work.

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Making that happen requires top-level buy-in. If the C-suiteincorporates risk into their decisions, others will follow. Add tothat by communicating widely, clearly, and continuously aboutexpectations. Assign responsibility for managing specific risks —and hold people accountable.

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With ERM, risk management is everyone's responsibility. Here aresix steps to help you launch an ERM program — and begin instillingan ERM mindset throughout your organization:

  1. Identify your risks and the potential impact on theorganization. What is your strategy forresponding to risk — and how will ERM help create andprotect value?
  2. Leverage what your organization is already doing tomanage risk. Apply current practices andstrategies for managing well-understood risks, like workerinjuries,  to other risks.
  3. Build support. Enlist the support ofall stakeholders: operations, sales, accounting, legal, and more.And designate a leader — preferably from the C-suite— to champion the ERM cause.
  4. Break it down. The idea of managingall risks can be overwhelming at first, so start with the risksthat have the biggest impact on the company's success and buildfrom there.
  5. Assign accountability. Designateresponsibility for each risk to whoever is most closely associatedwith that risk.
  6. Report on progress. How has ERM addedvalue to the organization?

Even with everyone on board, ERM won't eliminate risk— but it will minimize surprises. While it can feeluncomfortable at first to involve disciplines outside the riskmanagement department, ERM is well worth the effort. It breaks downsilos, adapts to changing conditions, and supports better decisionmaking. And if something unexpected does happen, you'll have theknowledge, tools, and culture to turn those challenges intoopportunities for success.

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David Brown is a senior product manager atRiskonnect,an integrated risk management software solutionprovider. 

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This piece first appeared on Riskonnect's blog and isrepublished here with its consent. Opinions expressed hereare the author's own. 

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