This white paper is the first of Protiviti’s “Early Mover” series that will discuss various aspects of Protiviti’s PRIM2 framework with the intent of helping companies become early movers in the marketplace. This paper discusses how proactively identifying and evaluating the risks inherent in a company’s strategy will make the strategy itself more robust and realistic as well as improve the probability of the company achieving its strategic objectives. Specifically, it discusses the importance of:
- Understanding the critical assumptions underlying the strategy and using contrarian analysis to challenge those assumptions
- Proactively identifying the uncertainties inherent in the strategy with a focus on minimizing as much as possible what we don’t know about the soft spots in the strategy and business plan and what lies ahead in the planning horizon
- Using the results of strategic risk analysis to drive monitoring of the external environment
- Keeping the risk assessment evergreen as the business environment changes
When the strategy is made more robust and realistic through the consideration of the underlying risks and its execution is effectively measured and monitored, management and the board of directors will have increased confidence that shareholder value not only will be created, but also protected. This critical balance enhances corporate performance management and positions the enterprise to become an early mover.
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