Companies looking to strengthen the effectiveness of their planning often reach points of confusion as they integrate new processes and update organizational methodoligies. As you begin to integrate modern enterprise risk management with your balanced scorecard, it will be clear that a connection is present. The question is, how do they fit together and how do you make the integration real?
Enterprise risk management is now focused on identifying and optimizing strategic risk. For companies with a properly implemented balanced scorecard, the tool not only houses organizational metrics but the strategic direction and resulting initiatives. After your board and executive have refreshed the strategic direction, as expressed through the scorecard and initiaitves, your ERM processes will be able to identfy and optimize strategic risk and make recommendations to these activities based on their assessment.
Once you understand your direction (the risks it mitigates and creates) you will be in a much stronger position to carry out the plans with confidence.