The Secret Treasure Buried in an Issues Audit
The essential first step of a crisis plan is an issues audit. Identifying vulnerabilities is critical to developing a crisis plan based on likely crisis scenarios. It also can be a revealing look into management, operational and capital decisions that can mitigate or eliminate risk.
Unmasking potential management, operational and capital decisions to reduce risk is an unappreciated dimension of issues audits. The chance to zero in on ways to reduce risk should be reason enough to conduct issue audits.
An empty wallet is the most common excuse for postponing a rigorous exploration of organizational vulnerability. A close second is a lack of time. Both are pallid justifications for avoiding the hard, but not necessarily expensive work to pinpoint problems and think about how to address them.
Too many executives lull themselves into believing a major crisis won’t occur on their watch, which leads them to shuffle their feet on a crisis planning exercise. They fail to recognize that identifying vulnerabilities can be a window into actions that would materially lessen exposure – or even gain a competitive advantage.
CFM’s approach to crisis plan development results into two deliverables – a strategy to address likely and consequential crisis scenarios and a list of smart investments to mitigate risk. This provides a very different approach to an annual capital investment plan. Instead of sets of competing priorities from different divisions, top executives would have a prioritized list of investments that would make a material difference in an organization’s risk profile.
A common compliment by managers after completing a CFM-managed issues audit is that it produces a lot more than an agenda of what to worry about. It also sheds light on what you can do to ease or even eliminate worries. This is the secret treasure buried in an issues audit.
“I was skeptical that an issues audit would do anything more than show us what we already knew,” said one manager who participated in a CFM issues audit. “What I failed to see until I went through the process was what the issues audit told us about how we could avoid risk. That’s priceless.”
A crisis plan based on realistic crisis scenarios is reason enough to conduct an issues audit. An added plus is a roadmap to risk-reducing capital investments or management steps. A typical rigorous issues audit lasts four hours, including time set aside for coffee and donuts. How else could you get so much value for a four-hour investment of staff time?
There is an even more subtle benefit from well-conceived issues audits. Bringing together the full cross-section of organizational top management induces a learning moment and a collaborative spirit. The team participating in the issues audit leaves the session knowing more about the operational pain points of their colleagues than any seminar or staff meeting could teach.
“I came into our issues audit knowing about my problems,” one senior official recounted. “I left with a deeper understanding pf the problems my counterparts face. What I thought would be a perfunctory meeting turned into an eye-opening opportunity.”
An issues audit would be worth the time and expense just to pinpoint the crisis scenarios in a crisis plan. Added value as a keen-eyed management tool is a bargain. Strengthening the camaraderie and collaboration of your staff can be a priceless benefit.
If you haven’t undergone an issue audit to identify your vulnerabilities, what are you waiting for?