2 minute read
IRM Focus
Harnessing the future
Horizon scanning is often talked about as an effective tool in identifying emerging risk – a new guide by IRM offers practical advice on the advantages of this approach for risk managers
The varieties and uses of horizon scanning are spelt out for risk managers in IRM’s new Practitioner’s guide to horizon scanning. Published by the IRM’s Innovation Special Interest Group (SIG), the guide offers advice on how risk managers can increase the resilience and reliability of their organisations by challenging assumptions and reviewing the ways that events could unfurl.
The new guide recognises that there are many definitions of horizon scanning, ranging from an organised and formal process of gathering, analysing and disseminating value-added information to support decision making, to exploration of what the future might look like to understand uncertainties better and to analyse whether the organisation is adequately prepared for potential opportunities and threats.
At its heart, horizon scanning is an alerting and creative activity used to identify emerging issues and potential causes of uncertainty, ensuring companies can make adequate preparations, exploit opportunities and survive threats. It is not about predicting the future.
Looking outside of your own organisation
An important element of horizon scanning is the consideration of information from outside the organisation that can’t be found in internal data sources. Looking outside at what is happening in the wider world, or ‘scanning the landscape’, enables a company to see what is coming over the horizon which could adversely affect its future commercial or other success, and perhaps identify a new direction to take which would give it an advantage in the future market place.
The guide outlines a number of ways in which risk
Institute of Risk Management managers can source such information, including listening to the views of Horizon Scanning: futurists, reading information from
A Practitioner’s Guide professional bodies and industry leaders, Produced by the Innovation Special Interest Group of the and keeping an eye on competitors. Institute of Risk Management
Communicating the results effectively
Effective communication and consultation are essential to ensure that key stakeholders and those responsible for managing risk understand the basis on which decisions are made and why particular options for action are selected. Developing risk professionals In capturing emerging risks on the horizon, risk managers should develop a framework for categorising them in order to develop a system of review, and assess their potential impact on the business in the context of the risk appetite of the organisation. This should include the predicted time to impact to help determine the need for a response and the relevant timeframe. The guide offers advice on the best way to present information to boards and make sure the analysis stands up to scrutiny. This will help risk managers to clearly articulate the importance of assessing the risks on the horizon against the organisational risk appetite, and to encourage a balance between risk optimisation and reward for acceptable risks. With an ever greater need for horizon scanning – as the world we live in grapples with the impact of technological and demographic changes – risk managers should take an enhanced role as the owner of this technique, and this guide outlines the simple steps to getting the process started.
