Enterprise Reinvention: How to Improve Corporate Performance through Enterprise Risk Management

Where companies have historically been able to improve results through specialization, successful reinvention requires a much greater emphasis on unification and facilitation—moving from managing the parts to leading the whole. This requires a different approach:

• Start with Your Customer
Every company's enterprise view and strategy needs to start with customers. Most executives agree with this tenet philosophically, but few enterprise reinvention and enterprise risk management programs follow this in practice. This requires that executives clearly establish, articulate, and integrate: where your company intends to go and why.

• Be holistic and systematic
Another principle to incorporate is to be both holistic and systematic. Without a shared enterprise view to guide companies in continually changing environments, companies often get stuck by focusing on the parts instead of the whole.

When competitive and organisational situations change, executives get caught working on the wrong things—on areas that used to be important but are no longer the bottlenecks.

• Don't Forget Your Community
A third insight—important for sustainable enterprise reinvention and effective risk management—is to systematically manage social roles. Companies are the only true economic engines for society, and strong communities are the only source of sustainable profits. When companies don't formally integrate into their communities and—instead—view themselves as separate entities, enterprise risk profiles will inevitably increase.

Integrating Enterprise Reinvention and Enterprise Risk Management
Enterprise risk management is an important tool for sustainable competitive advantage. Similar to the market and the enterprise itself, a successful enterprise risk management program requires holistic and systematic processes to support the following:

• Envision: An Enterprise strategy linked to customer needs, with defined operational implications, and well-articulated enterprise guidelines for managing risks and opportunities.
  
• Design: Formal risk mitigation and opportunity sensitivity analysis/monitoring/reporting.
  
• Build: Enterprise-wide controls, processes and infrastructure.
  
• Operate: Well-established personal roles and motivations for people to act in the best interests of their companies—at the enterprise level—through proper incentive structures.

For companies to successfully reinvent themselves, the enterprises can't be viewed as the sum of their parts. The enterprise overall is the goose that lays the golden eggs. Similar to a brand, it needs to be holistic, integrated and relevant—and continuously adapt through successful and accelerated enterprise projects.

Improvements

To improve your company, try taking your enterprise reinvention and enterprise risk management program to the next level. Integrate "Envision-Design-Build-Operate," to achieve your objectives through a shared enterprise framework, integrated roles and responsibilities, and adaptive monitoring/sensitivity analyses.

Holistic approach

Then, holistically address risks through independent program assessments to diagnose and correct identified weaknesses and take full advantage of new opportunities.

Given our rapidly changing and hyper-competitive business environment, there has never been a better time to reinvent your enterprise and your enterprise risk management program.

Clearly, this will require a different approach than the scientific management methods that worked so well in the old Industrial Age.

The new knowledge-based approach is at the heart of systematic and sustainable enterprise reinvention. The best time to start your reinvention is today.