Risk and Performance, Transformation & Continuous Improvement

Following on from our earlier discussions on Finance Transformation, process change and continuous improvement, I coincidentally hit on three very interesting and relevent items in my mailbox.

In the first mail that caught my eye, Gartner Group, the well regarded technology analysts, had just released a report entitled 'Developing Key Risk Indicators: Developing Causal Chains to Link Risk to Business Outcomes'. I was intrigued by this line of thought, in no small part because it reflects my own experience and thinking, as well as some of the insights in our webcast I described in my previous post. I believe there is a lot of valuable thinking and action that will come from a better appreciation that risk and performance are two sides of the same coin, not different topics to be managed by different organisational units with different performance measures!


Some of Gartner's key observations are;

• Good risk management informs better business decision making
• The relationship between risk management and corporate performance should be conceptually and intellectually obvious!
• 'Causal Chains' are useful tools to map risk to performance impact (very similar to the description of defect monitoring and the impact on management decisions to optimise performance, from the webcast)
• Linking KRIs to KPIs is A GOOD THING

The Gartner report is available at http://response.approva.net/forms/GartnerDevelopingKRIs2011?elq=c83748b0d49e41a1aa64dcd4c2a29b71

I also received a link (thank you Hans!) to a YouTube recording of a great, and funny, presentation from 1994 by Dr Russell Ackoff, who I believe was a peer of the 'Total Quality' guru Dr W. Edwards Deming. The talk is dated, yes, but many of his points are well worth listening to and thinking about. Large scale processes as a 'system' in the biological sense is a powerful metaphor and helps address some of the issues of the 'Law of Un-intended Consequences' that we spent some time on during the webcast. There is one point I probably disagree with, but I will leave you to guess that one! The talk is entitled ' Beyond Continuous Improvement' and can be found at http://www.systemswiki.org/index.php?title=Beyond_Continuous_Improvement_with_Russell_Ackoff 

Finally, in this stream of consciousness, I read a brief article by Linda Tucci entitled ' Disruptive Innovation vs Performance Improvement'. This article led on a historical review of a 1970's technology leader and the start of their fall from grace. Again, there are a lot of parallels here for whtat we are trying to achieve in the business world today. Food for thought, for sure. Linda's article is at http://searchcio.techtarget.com/news/2240033844/The-CIOs-dilemma-Disruptive-innovation-vs-performance-improvement?asrc=EM_NLN_13565182&track=NL-964&ad=822905

If you want to work out the particular lens I was observing these issues through, you could do worse than view the recording at http://www.consider.biz/events/161-finance-transformation-webcast.html

Talk again soon

Best Regards

Dan