This book provides a set of tools to help executives think systematically and strategically about future risks in an ever more uncertain and rapidly changing world and deal proactively with threats to their competitive advantages.
Most organizations manage risk using Enterprise Risk Management, which looks at past exposures or actuarial assessments to identify calculable and predictable threats. But the world is changing so quickly, and in such unexpected ways, that executives need to tackle risk head-on as an integral part of their strategic planning process. Strategic Risk Management is a far more forward-looking approach that emphasizes future potential over past actions–it’s the next step in the evolution of risk management. The authors describe its foundational architectural elements (knowledge, principles, structures, and tools) and show how leaders can integrate them to design and implement an effective Strategic Risk Management program. This book aims to provide executives with a clear understanding of how to think about strategy in ways that account for events or exposures that fundamentally threaten or enhance a firm’s competitive advantage.