Managing your organisation’s SCORE effectively

Risk management is rightly seen as an important governance issue by Not for Profit Boards and Committees of Management. The challenge is how to develop and implement the appropriate framework to identify and manage the risks effectively. 

 First and foremost is the issue of identification. Undertaking any activity, no matter the size or scope, has inherent challenges and risks. If we accept this basic precept we need to identify what is to be achieved through the development and implementation of a risk management framework. 

 The primary focus of most Not for Profit Boards / Committees of Management is in achieving the organisation’s Mission, and therefore risk management is generally viewed in the context of “what can go wrong” as we embark on this journey.

 One approach to risk management is to list all the things that can go wrong and to develop strategies to eliminate the likelihood of their occurrence and / or to alleviate the real or potential damage to the organisation in the event that they do occur. 

 The risk to the organisation in this approach is that the focus may be on what can go wrong rather than on what we are doing right and how we can continue to develop and build on our success.

 One option is to move this mindset to a change in focus from risk management to a strategy encompassing the organisation’s strengths, challenges, opportunities, risks and ethical dimensions (SCORE). This allows the acceptance of the multiplicity of each of these measures. That is, an organisation’s strengths can also have relevance in determining and assessing the challenges, risks, opportunities and ethical considerations faced by the organisation.

 An example of this might be if we consider our staff as one of our greatest strengths; a challenge might be in the retention of the staff; an opportunity is utilising the diversity of skills to broaden the services offered; a risk the lack of awareness of the staff’s activities/ skills outside of the organisation; and the ethical dimension is how we treat our staff.

 Risk management therefore transforms from an identification and ranking exercise to a strategy to effectively manage the organisation’s strengths, challenges, opportunities and risks within an ethical framework (SCORE).

Regardless of whether our focus is on risk management or the broader SCORE, the second step in this journey is the need to establish a framework to ensure effective management of the process.

 The approach that Enterprise Care recommends incorporates: 

1. Assessment at project level – encourage staff and project managers to develop and document project scopes prior to commencement. Amongst other things the project scope should include identification and analysis of the project’s SCORE;
2. Appropriate monitoring – establish a process to monitor the status of the project’s SCORE by the project manager;
3. Reporting framework – develop a reporting mechanism which enables the SCORE and their status to be discussed, as appropriate, at project, staff, management team or Board/ Committee meetings. This will enable a broader organisation approach to the classification and management of common issues across projects to be identified and implemented;
4. Strategic focus – where changes in the status of any of the SCOREs is likely to have either a significant positive or negative impact on the organisation’s operational targets or future strategic direction these changes should be actioned in terms of priority according to the established reporting framework;
5. Governance role – the Board / Committee of Management or the delegated committee should, on at least an annual basis, assess the overall framework to ensure its suitability and functionality.

 For further information on developing a suitable framework to manage your organisation’s SCORE please contact Mark Rudd on ruddm@enterprisecare.com.au