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ITS835_Spring_1G_2019_Week2.pptxITS 835 Enterprise Risk Management
Week 2: Strategic risk management
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Week 2
Chapter 6: Strategic Risk Management at the LEGO Group: Integrating Strategy and Risk Management”
Chapter 9, “Lessons from the Academy: ERM Implementation in the University Setting”
Chapter 6: Strategic Risk Management at the LEGO Group: Integrating Strategy and Risk Management”
Descriptive case study
Great example of integrating risk management in strategy development and execution at LEGO group
Strategic Risk Management lab at DePaul University
Website to visit
Strategic Risk Management lab at DePaul University
ERM and strategic risk management
How can organizations manage strategic risk in a fast-paced business environment
Systematic approach needed and highly valuable to include strategic risk management in ERM
LEGO Group
Headquartered in Billund, Denmark
12, 500 employees
25 product lines sold in 130 countries
LEGO Group Strategy
Growth strategy
Innovation strategy
Elements of Risk Management-Four Step Approach
**Good example of how to evolve beyond traditional ERM and integrate risk management in to the strategic decision making of an organization
LEGO Strategic Risk Management
ERM
Monte Carlo Simulations
AROP
Preparing for uncertainity
LEGO ERM Umbrella
Monte Carlo Simulations and Risk Appetite at LEGO Group
LEGO’s PAPA Model
Conclusions
Great example of how ERM is integrated with Strategic Risk Management
Risk management should enable to take the risks necessary to grow and create value
Chapter 9 Lessons from the Academy
Unique aspects of the University of Washington’s UW risk environment
Challenges of risk management in higher education environment
Decision to adopt and implement ERM
Higher Ed Environment
Different from for-profit
Organizational type impacts institutional culture
Risks in Higher Ed
Risks arise from a variety of sources
Failure of governance and leadership
Business or consortium relationship
Act of nature
Crisis related to student safety
Violation of federal or state laws
ERM in higher Ed
Fairly new in the higher Ed
Engaging in ERM not specifically a requirement for accreditation
Significantly less developed
Focused more on avoidance of loss than strategic direction
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University of Washington
Robust ERM now in its 7th year
ERM program triggered by settling a Medicare and Medicaid overbilling statement - $35 million
Journey of discovery
Currently focused on strengthening oversight of top risks
Enhancing coordination and integration of ERM activities
UW’s Approach to Risk Management compared to other institutions
Evolution of ERM at UW
UW ERM Structure
UW ERM Process
UW Lessons Learned
Early wins were at the unit levels
Aware from the onset of the decentralized environment
Chose not formalize ERM through senior level position
Involved key stakeholders such as faculty from beginning
