sascom voices - The sascom magazine blog

Chief risk officers (CROs) are in the spotlight, and so they're performing detailed reviews of their processes and adopting new practices in governance, risk and compliance and enterprise risk management. This may seem like the best move to ensure the organization’s health, but for the long-term, this hyper-responsive reaction could be like weed killer to innovation.

Under such close scrutiny, CROs could become so risk averse that they unknowingly slow down innovation. This slow down results from additional controls or increased restrictions in processes where innovation typically grows.

Protect innovation by incorporating it in the risk management process:

• Begin by assessing the potential level of innovation within business processes under the existing controls.
  
• Then, assess the change in innovation after introducing new controls or tightening existing controls.
  
• Now, involve key stakeholders in the approval of new or enhanced controls that could potentially limit or stifle innovation.

Long-term growth and competitiveness is ensured through innovation and modernization. I’ve included a few more ideas in How can CROs protect the innovation engines in their organizations?