Risk in work unit business planning: What is it? — Clear Lines on Audit and Risk

In business planning, ‘risk’ is just the possibility that your unit’s outcomes for the year will be different from those you promise.
What to read first: Risk in work unit business planning: Start here
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You have found a how-to guide for confidence. It shows you how to have confidence in a good outcome from your unit.

That outcome is the total outcome from the year covered by your unit’s business plan.

Confidence is the result of understanding and managing risk. Understanding and managing risk delivers more than confidence for you as the unit manager. It delivers confidence that your boss can share, along with the rest of your organisation.

What you’re doing is managing. It’s not an optional extra role called ‘risk management’.

You don’t need to know anything about ‘risk management’ before building confidence in your business plan. You need to know your business. And somewhere between you and your boss, you need to know what’s acceptable to the organisation.

In the Clear Lines on Audit and Risk, risk management is always done for the right reasons. It exists only to achieve confidence in outcomes. You will have that confidence, and you will share that confidence with others.

Each of the how-to steps in this guide are toward that confidence. The goal remains in sight at each one of those steps. None of the steps require that you believe in ‘risk management’ as a process.

This guide is designed for big and small work units. It expands for work units big enough to contain many other units. It is also intended for single work units barely big enough to have their own business plan.

The Clear Lines on Audit and Risk do not know your business the way you do. The guide recommends steps for you to take. It does not advise you on the particular risks in your work unit’s activities, or on the risk in your organisation’s business. You need to know those yourself. Following this guide may lead you to finding out more about them, using your own capabilities.

This guide does not cover Enterprise Risk Management, project risk, or thematic risk such as safety and security. Neither is it about quantitative risk work for financial services. The full meaning of ‘risk management’ is explored in another series on this site.

You may have been given some corporate guidelines on risk in your business plan. There will be some differences between this guide and the corporate guide. Either way, you can get the confidence you need from using this guide.

In business planning, ‘risk’ is just the possibility that your unit’s outcomes for the year will be different from those you promise.

You start with the business plan, whether it is a polished draft or just a general idea of how things are to be. ‘Risk’ is just the possibility that your unit’s outcomes for the year will be different from those expected by your organisation. Risk isn’t bad, or good. Taking more risk can be the way to better performance outcomes.

These views come from the International Standard ISO 31000. It says that risk is the effect of uncertainty on objectives.

‘Risk’ can mean a lot of things, but risk in business planning leaves out a lot of the complexity.

Risk in work unit business planning: A how-to guide
What is it? Why you might care about risk in work unit business planning This article

First steps	➜	Next steps	➜	Final steps
Find the unit outcomes that matter		How your unit might not deliver the outcomes		Taking action

Why this way? How the Clear Lines are different