EtQ’s Tim Lozier looks at the role that risk-based thinking can play in safeguarding both business and reputation.
There is now a high level of complexity in how companies are organized ‒ there are more mergers and acquisitions, production is executed on a global scale, supply chains are more complex and competition is intensifying. Add to this the increasing pace of change in the business environment. Competition is leading to shorter product lifecycles, increases in product complexity and a wider variety of goods in a broader range of areas. At the same time, regulations are constantly evolving to reflect these changes.
The current challenge for businesses is how to maintain a strong level of compliance where there is greater uncertainty, complexity and ambiguity in both the internal operational context and the broader external environment. Businesses have begun to recognize that succeeding under these conditions will involve a company-wide commitment to realizing strategic goals, where there is a high degree of coordination and collaboration between functions, with quality as a common principle
The Strategic Reach of Quality Management
This is leading to a shift in mindset around quality and compliance. Quality is extending its scope from the development and delivery of products and services, and is addressing strategic objectives across the organization. A broader range of stakeholders now engages in quality management, and this is how quality has become a culture. This quality culture involves setting high bars for performance throughout the organization, whether that's for quality, environmental performance or safety.
As a result, businesses need a systematic and objective way to measure themselves, not just within quality and compliance but across all operations. Risk-based thinking is establishing itself as the proven approach. Risk is a concept that is universal to most organizations ‒ most people speak risk, even if they don't speak quality or environmental performance.
How Risk-Based Thinking Can Help
Risk-based thinking applies the concept of risk to quality and EHS processes, so that there is a common language and metrics for assessing how those processes are meeting their goals. It allows a company to normalize how it communicates its measures of operational efficiency to more people within the organization.
So risk is no longer confined to Governance, Risk and Compliance (GRC) but instead is becoming embedded in all aspects of the business, as operational risk management. Quality, EHS and compliance are viewed through the lens of risk to improve the efficiency of their processes. There is greater visibility and more control, leading to better decisions. Businesses are able to translate what they do on an operational level to a risk-based paradigm.
The big challenge now for many businesses is how to implement risk. Our latest guide will help you start your risk journey. We will provide an overview of the most critical risks businesses face today and show you how apply risk-based thinking to your processes. We'll look at a real life example and take you through the issues you need to address in order to develop the people, processes and systems essential to establishing a risk-based quality culture across your business.
Download our handbook for a wealth of resources to help extend risk-based thinking across your organization, safeguard the business and its reputation. The Risk Management Handbook: Supporting a Quality Culture Across Your Business