We want a balance that produces the optimal blend of rewards and losses. At Freddie Mac, understanding these issues and their interrelationships means that a new culture of risk awareness occurs, leading to better decisions by all employees. Canada Trust sees the process producing competitive advantage. So does Microsoft. Operating managers become partners in the assessment and management process.
Assessments begin at the bottom.
This theme occurs in almost all projects that I've seen. Operating people know their own risks best. Mike Oswald, of Australia's Context Risk Management, recommends that business units be assigned responsibility for managing risks within their capabilities. Collect data and construct models. A successful risk assessment effort depends on accurate information fed into econometric models that provide guidance for decision-making.