Part of doing business is accepting uncertainty. Organisations constantly face new economic developments, stricter environmental requirements, availability of goods or materials, personnel shortages, and so on. The better a company deals with these uncertainties, the greater its chance of success in the future. In other words, those who manage risks correctly perform best.
Do you want to do well as a company? Then not only do you manage risks, but you also turn them into opportunities.
Uncertainty in everyday business life can harm business objectives. Yet this is certainly not always the case. When also those risks are found that can have a positive influence, risks can be turned into opportunities. This is how organisations distinguish themselves from others and secure their results and reputation for the future.
So how can organisations approach this properly? For instance, by following the guidelines of the international ISO 31000 standard.
With the international ISO 31000 standard, organisations are steering risk management in the right direction. It is the only internationally acknowledged ISO standard in risk management, and it defines risks that can affect financial results, reputation, social environment and safety within companies. Compliance with this standard effectively and positively contributes to the performance of organisations in uncertain environments.
ISO 31000 is an alternative to, for instance, the COSO and RISMAN management models. It provides organisations with a framework containing a set of principles and processes with which these organisations, regardless of sector, size, or business activity, can manage risks. This standard can be applied to many activities within organisations, such as project management, product management, or asset management.
Whereas other management standards often consist of a set of requirements, ISO 31000 consists of a set of generic guidelines. As a consequence, certification does not exist for entire organisations. Instead, professionals can obtain a personal certificate. This is an objective, written proof that they can work with the methodologies, guidelines, and approaches that fit this standard.
The first version of ISO 31000 dates back to 2007, and it officially came into force in 2009. The latest version was revised in 2018, resulting in the updated standard ISO 31000:2018. This updated guideline has been active since the middle of 2019.
Within the updated ISO 31000:2018 guidelines, the description of the risk management process in relation to the framework has been improved. It is now more clearly described which issues must be included within the scope of various processes:
When updating the old ISO 31000 guidelines began in 2018, a considerable amount of streamlining took place. As a result, directives that were no longer necessary for correct implementation were deleted or moved.
Prior to this streamlining, ISO 31000 consisted of 11 principles. Five principles were dropped during reformulation, after which eight principles remained:
Good risk management according to the ISO 31000 standard has many advantages:
When companies can apply best practices around risk assessment, the probability of them achieving their objectives increases;
When you have a clear, correct understanding of risks, it is easier to make targeted decisions for improvement;
When an organisation has a risk-aware culture, well-considered decisions are made at every level, for instance, in allocating resources.
When an organisation implements ISO 31000, it indicates that it consciously deals with risks to the outside world. It signals that not only risks are being identified but also analysed and managed. It demonstrates that the organisation is continuously working to improve quality.
The revised ISO 31000 standard highlights that risks should not necessarily be seen as negative. Risks can be converted into opportunities, which can positively influence the achievement of objectives.
This norm is suitable for all organisations, regardless of size, sector or business activity. Is the organisation growing? If so, there is no need to introduce a new risk analysis or control process, as the ISO 31000 also offers tools for this.
Consider, for instance, standards like ISO 9001 for quality management and ISO/IEC 27001 for information management.
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If you want to improve compliance, risk management must be not only the responsibility of management or senior management. The entire organisation should be involved to obtain the broadest and most transparent possible overview, and all employees should be able to contribute.
As mentioned earlier, the essence is to identify and evaluate risks and actively deal with them. One way to do this is with control strategies, within which you implement a set of measures. A strategy is determined by management, and the people on the work floor ensure that this strategy is also translated into reality.
As simplistic as it may sound, good risk management depends on the degree of ownership throughout the organisation—a simple matter of getting everyone on the same page and collaboratively working on constant improvement.
The easy-to-use, straightforward interface of the Zenya software makes this possible. Even those without much technical knowledge or ability can work with Zenya, making taking ownership possible for everyone.
Is your organisation looking for software that will help it comply with the standards of ISO 31000? Zenya can be utilised in the following ways:
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