Each discipline within the RBPM framework and methodology has been constructed from both Balanced Scorecard and Risk Management viewpoints. In essence, it allows organizations to “manage with one eye on performance and one eye on risk”.
IntroductionAs a key message throughout this book, we argue that compartmentalizing strategy management and risk management within separate organizational silos is inappropriate – we go as far as to say “dangerous” – given the economic, competitive and other pressures faced in these “continuous turbulent times”. If silo thinking is inappropriate, then it is safe to also argue that managing organizations according to separate Strategy and Risk Management frameworks is equally unsuitable and, in these times, unsustainable. The Credit Crunch made this fact abundantly clear.
The RBPM approach is designed to meld strategy and risk management into a single, unified framework, thereby rectifying the shortcomings of managing both strategy and risk in isolation. Shortcomings include failing to articulate, and therefore manage, the key risks associated with the delivery of specific strategic goals, and more profoundly, not aligning the organization’s appetite for, and exposure to, risk with those goals.