Successful business is required to maintain a systematic approach and do all the right things to stay ahead. In terms of action, this shall imply to having operations in line and defining a strategy that can work competently. However, a number of companies lose out on marketing opportunities as they tend to ignore strategic risks. While operational risks do post a threat, strategic risks often get overlooked, but usually have a more significant impact. Professionals like Michael Saltzstein commonly help out companies with the aspect of strategic enterprise risk management.
In the simplest terms, strategic risk can be defined as the risk associated with failed business decisions. Such type of risks impacts the overall business strategy, but are at times needed to reap rewards. For instance, banks do take strategic risks by offering credit, but it is an inherent risk that is directly linked to its business goals. These risks take place when businesses do not meet the market needs.
For the purpose of achieving important business goals, companies face downfalls and dangers. Each and every internal choice comes with the potential of making the wrong choice. Strategic risks additionally are not only based on subjective decisions, which complicate the things even more. Many of them are even caused externally due to of market demand and the environment in which products get released.
In case a company sets up risk management as a continuous and disciplined process with the aim of identifying and resolving risks, then discerning risk management structures might end up getting used for the purpose of supporting other risk mitigating systems.
Strategic risk management essentially is the system of identifying risks, analyzing their potential impacts and taking certain important actions for the purpose of mitigating them. There are many internal and external risks that pose a threat to the strategies and objectives of a company. For instance, in case finance based company is going to sign a new big client, they might face an inherent risk to not be in the position to scale swiftly enough to provide full service with the client needs. If the finance company is well acquainted with this risk, however, they may take the steps to hire part-time staff or keep existing staff and free up their time by driving more efficiencies with the help of automation tools to mitigate such risk.
As a focal point under ERM or enterprise risk management, strategic risk management puts emphasis on the types of risk that might impact the stakeholder value. For this purpose, executive level leadership would be required to allocate their time to help manage and face this risk. Technological changes, senior management turnover, merger integration and stakeholder pressure are few examples of strategic risks.
To help them out in the process of risk management, companies can always seek out assistance from professionals like Michael Saltzstein. He is a visionary leader of global risk services, financial structures, multi-line claims, and strategic planning and enterprise initiatives. Over the years, he has managed to be successful in delivering multimillion-dollar expense reductions and bottom-line improvement, maximizing coverage, and minimizing cost. Michael has optimized award-winning risk programs, economic strategies, reserving, and best practices and state-of-the-art coverage in the past.