In an economic environment increasingly characterized by chaos and sudden fluctuations, what Italian companies are facing can no longer be defined as a scenario of complicated uncertainty, but rather of volatility.
While this seems like a statement without major implications, the difference is substantial when properly contextualized. In fact, until now we have been used to talking about uncertainty, which we could define as a situation in which we have no certain elements to define whether things will change, to what extent and in what way; by introducing the concept of volatility, on the other hand, the fact that the reference context changes is no longer a possibility but almost a given, becoming for companies a constant that is increasingly complex to manage both considering the daily work and that related to the planning of medium-term strategies.
Thus, Risk Management places itself, and if you will, in this very context, becomes legitimate. It represents a solution for those companies that want to change their approach to risk, starting from a passive point of view where the goal is to find a solution to the problem when it is already a reality, to a proactive point of view based on the preventive framing of risks and the advance planning of possible responses to them.
Roncucci&Partners helps companies with the implementation of Risk Management, just like Project Management, which it has been involved with for 20 years. And Risk Management, as, moreover, Project Management itself, is not just a working method, but an element, important today, of corporate culture. Knowing how to manage risk means increasing the chances of business survival or growth.
What is the level of risk a company is willing to take, its “propensity” for risk? How does the perception of risk change as the external environment changes? What is the risk threshold above which investment will not be made?
Risk management results in a very linear process consisting of four basic steps:
– the identification of risks
– the analysis of risks
– the planning of responses to risks
– the control and monitoring of risks
But Risk Management is not a list of possible risks, it is the ability to assess the probability of that risk occurring and the impact that the occurrence of that risk would have on business dynamics.
The same thing can be declined in individual projects, when Risk Management is combined with Project Management. And this is what Nova Coop, one of Italy’s largest consumer cooperatives, has decided to address. Nova Coop, the first consumer cooperative in Italy to address the issue, and Roncucci&Partners worked together, introducing Risk Management in the context of Project Management, which is the risk management integrated with project management. About four years after introducing Project Management in the cooperative, again a unique example in the national panorama, Nova Coop felt the need to implement risk management as a complementary part of the methodology as well.
Starting from an analysis of the problems that emerged in the company with regard to the planning and later implementation of the developed projects, the theory of Risk Management was applied according to the company’s characteristics. A key role was played by the PMO, Project Management Office, i.e., the organizational unit responsible for the methodological management of projects. The analysis of operational flows and the definition of risk parameters completed a path that then resulted in application procedures. The ultimate goal is to represent the elements of risk in a project at the planning stage first and then at the implementation stage, such that Management can decide whether or not to go ahead with an investment.
Increasing awareness of choices is a key element of decision-making today, and Risk Management is not about eliminating risks and the magnitude of consequences, but it is about being able to assess whether the risks involved in implementing a project are acceptable or not. We believe that all of this is a determining factor in staying in the market today.
Clearly, such an approach means combining entrepreneurial flair with an assessment tool on potential success, or failure. In Italy there is no culture of project management, let alone risk management, but we believe that the path of progressive acquisition of knowledge, and of skills and competencies, is an irreversible one. And not, or not only, because of internal company choices, but because of the objectivity of market external situations.
The introduction of risk management in Nova Coop was then accompanied by training for both project managers and company management, reflecting the willingness and awareness to acquire this new way of managing business risk.
Roncucci&Partners is proud to say that every project developed in Nova Coop now includes not only an initial planning of all the fundamental elements of Project Management, including activities, human resources, timelines and costs related to the project, but also a new component, focused on the risk assessment of the project itself.