As a manager, you need to know how and why these risks arise and how to avoid them.”Īccording to Strategy Execution, strategic risk has three main causes: “But high-performing businesses with high-pressure cultures are especially vulnerable. “Competing successfully in any industry involves some level of risk,” says Harvard Business School Professor Robert Simons, who teaches the online course Strategy Execution. It involves analyzing risks’ likelihood and impact, developing strategies to minimize harm, and monitoring measures’ effectiveness.

Risk management is the systematic process of identifying, assessing, and mitigating threats or uncertainties that can affect your organization. If you want to enhance your job performance and identify and mitigate risk more effectively, here’s a breakdown of what risk management is and why it’s important.įree E-Book: How to Formulate a Successful Business StrategyĪccess your free e-book today. Economic, technological, environmental, and competitive factors introduce obstacles that companies must not only manage but overcome.Īccording to PwC’s Global Risk Survey, organizations that embrace strategic risk management are five times more likely to deliver stakeholder confidence and better business outcomes and two times more likely to expect faster revenue growth.