Many companies are engaging in Lean Six Sigma activities, but may not be applying the Lean principles to the risk management function. Applying Lean principles to the risk management function results in the following.
- Reduction in operation costs and increase in revenue
- Elimination of non-value added steps (waste)
- Increase in productivity
- Increase in customer satisfaction
- Increase in employee morale
Those companies that focus on systems and process as a part of their risk management department are proactive and generate increased productivity and more positive outcomes with less waste. The following are important attributes of Lean risk management departments:
- Information systems designed to share information between the company's business units
- Routine communication between risk management and key management
- Corporate goals and philosophies well understood and supported throughout the company
- The risk management department is actively engaged in finding ways to more efficiently and effectively identify and manage risk
- The risk manager is not "broker dependent" and draws from a variety of experts in and outside of the company to address complex issues
- The lessons learned are shared throughout the company
Risk management departments that have these Lean attributes provide meaningful opportunities for continuous improvement within the department and throughout the company. I’ve written several white papers applying Lean principles to the risk management function.
I look forward to helping companies bring Lean principles to their risk management department.
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