risicomanagement partos plaza

1www.risicomanagement.nl

Risk Management for Development Interventions: mobilizing efforts to embrace the change

Magda Stepanyan 20 juni 2013

m.stepanyan@risicomanagement.nl

2www.risicomanagement.nl

Who we are W

ho

we

are

The Nederlands Adviesbureau voor Risicomanagement (NAR) is an independent organization which is specialized and purely focused in the field of risk management. We offer a total package of products and services that will enable your organization to manage its risks independently. The complete package consists of advice, software (NARIS), together with training and coaching (at the Risk Management Academy). We work in many different markets within public and privet sector. We are fully committed to support non-governmental organizations to improve their performance by managing uncertainties. In 2012 NAR has established a partnership with Partos and VFI with the purpose to develop capacities within the Dutch development/charity/humanitarian sector.

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Who we are W

ho

we

are

Magda Stepanyan, MA, MSc, CIRM

Expertise: Over 15 years of management and consultancy work in the field of development cooperation, disaster and climate risk management, monitoring and evaluation.

Worked for: EC, WB, UNDP country offices, UNDP regional Centre in Bratislava, UNISDR, IFRC, Cordaid, etc.

Geographic focus: global with a primary focus on CIS/CEE region.

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The only thing that is constant is change….

Heraclitus

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How should we deal with this uncertainty?

1. Ignore: ‘planning paradox’, linear cause-effect

relationship

1. Embrace: flexible result chain, move from

stable and predictable environment to a

dynamic environment with many parties (known

and unknown), indicative planning, looking for

opportunities

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Embrassing uncertainty

‘A Country Partnership Framework and a Bank’s reorganization without clear, explicit, and fundamental consideration of risk and risk

management would suffer from the “planning paradox” of making plans while ignoring uncertainty’.

Norman Loayza

Director of the World Development Report 2014

WB

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Growing attention to managing risks G

row

ing

atte

nti

on

to

man

agin

g ri

sks

Busan Partnership for Effective Development Co-operation, Fourth High Level Forum on Aid Effectiveness, 2011

OECD Aid Risks in Fragile and Transitional Contexts USAID Resilience Policy, 2012 EU Risk Mapping, 2010 WB, World Development Report 2014 UNDP, Capacity Development Facilities (CDF) Publieke managementletter voor de Goededoelensector:

Goed doel, goed verhaal (Aanbeveling: Doorloop in de organisatie een zorgvuldig proces voor het juist inrichten van het risicomanagement.)

Development work must internalize risk!

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Some basic definitions

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Key concepts: establish baseline and common language

Risk: Effect on uncertainty on objectives (ISO Guide 73) Combination of the probability of an event and its

consequences (IRM definition) Uncertainty: Uncertainty describes the quality of our knowledge concerning risk. Risk management: Coordinate activities to direct and control an organization with regard to risk (ISO 31000)

systematic, continuous, taking vs. managing risks

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How to describe risk H

ow

to

des

crb

e r

isk

O

OR

ZAK

EN

GEB

EUR

TEN

IS

GEV

OLG

EN

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How to describe risk H

ow

to

des

crb

e r

isk

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Risk Identification: typology R

isk

Iden

tifi

cati

on

Risk identification categories: - One-off risks vs. Repetitive - Bruto risks vs. Netto risks (after response measures) - Strategic (speculative)risks vs. Control or Operational (project)

risks vs. Hazard (puur) risks Risk identification areas: - Activiteis - Departments - Programme - Project phases - Partner - Network - Sector - Etc.

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Growing attention to managing risks G

row

ing

atte

nti

on

to

man

agin

g ri

sks

Development work must internalize risk!

a) Institutional

(setting the development agendas, developing and implementing policies and programming)

b) Organizational

(effective, efficient, and relevant realization of developmental objectives)

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Interesting example of risk assessment and horizon scanning

Exam

ple

Risk management for policy making A Leading Centre of Expertise in Strategic Anticipation for National Security http://app.rahs.gov.sg/public/www/home.aspx

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Group Exercise: 15 min Tr

end

ing

risk

s in

dev

elo

pm

ent

sect

or

What are the trending risks in the development sector?

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Why proactive risk-taking is still a challenge?

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Fundamental challenges Fu

nd

amen

tal c

hal

len

ges

1. A culture of blame vs. learning from failure

“I have not failed, I have found 10,000 ways that do not work”, Thomas Edison

2. Lack of adaptive capacity on the part of development organisations vs. embracing opportunities

3. Lack of a shared concept of risk management vs. institutionalizing risk management

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Do you know that ….. W

hy

risk

cu

ltu

re is

imp

ort

ant?

The more hierarchical is the culture in the country where the pilots are from, the more submissive are the co-pilots and the larger is the number of incidents* * Source: Boeing research on airplane crash incidents

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Risk Culture and Risk Perception W

hy

risk

cu

ltu

re is

imp

ort

ant?

Risk culture defines: - organization’s attitude towards risk management - how staff members - feel obliged to behave - regarding risks - how open staff - members talk about - risks (threats and - opportunities) within - the organization

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Elements of risk-aware culture: W

hy

risk

cu

ltu

re is

imp

ort

ant?

Strong leadership

Involvement of all stakeholders (!)

Training in risk management and learning from events

Communication and openess on all risks

Absence of an automatic blame culture

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Engagement: Mobilizing efforts:

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Risk Identification: Risk Perception R

isk

Iden

tifi

cati

on

: Ris

k P

erce

pti

on

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Managing Risk for Better Results M

anag

ing

risk

Video on Marshmallow Challenge

http://marshmallowchallenge.com/Welcome.html

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Remember to ask! R

isk

Cap

acit

ies

What are our risks?

Whose risks matter: whose threats and whose opportunities?

Are we aware of the risks of our partners?

What implications the risks of our partners may have for us?

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Managing Risk for Better Results R

isk

Cap

acit

ies

Ensure a policy environment that is favorable to proactive risk management as a measns to improve performance.

Encourage organizations to darw up their risk overview based on an assessment of how critical the risks are to the organization (likelihood/impact)

Allocate resources for risk management in the organization

Develop risk management capacities among staff members

Ensure risk-based planning and risk-based decision-making

integrate risk management into the overall approach to change management.

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Partnership: NAR/Partos/VFI R

isk

Cap

acit

ies

Risk maturity survey: we measure the level of risk maturity in the Dutch charity sector;

Risk Management Knowledge Hub: we set up a sector-specific Knowledge Hub to steer and customize the application of risk management in the sector.

Capacity development: we offer an extensive portfolio of training programs, workshops, round-table discussions, symposia, etc.

Trending Risks: we regularly share our understanding of the trending risks in the sector.

Risk Management Database: we develop a sector-specific database to enable cross-sector comparison and learning.

Risk Management Information System – NARIS: we make our risk management software available free of charge to all Dutch charity/development /humanitarian organizations to support their operations and ensure effective management of their risks.

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Useful resources U

sefu

l res

ou

rce

s

NAR MVO: www.risicomanagement.nl/mvo.html

The Broker: Blog on Risk Management

www.thebrokeronline.eu/Blogs/Risk-management-for-development

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Thanks!

Magda Stepanyan

m.stepanyan@risciomanagement.nl