2018 Risk in Review Study

Managing risks and enabling growth in the age of innovation

Innovation, effective risk management and growth: striking the right balance

As technological innovation continues to revolutionise the business landscape, organisations are also grappling with newfound risks and unchartered challenges. PwC's 2018 Risk in Review Study of more than 1,500 senior risk executives globally, shows how a distinct set of risk management practices can arm organisations to capture value from their innovation efforts and better manage related risks for future growth.

Adapters - those with risk management programs that effectively manage innovation-related risks are two to three times more likely to express confidence in their risk management program's ability to effectively manage risks from new technologies compared to their less effective peers.
 

Adapters

Given the many benefits of embracing innovation in a risk-conscious manner, we identified five distinctions that separate Adapters and Non-Adapters.

  1. They engage early and often across the innovation cycle. Adapters are twice as likely as Non-Adapters to advise on innovative activities before the planning stage.
  2. They use multiple actions to address their risk exposure from new initiatives. Adapters more often use four or more actions ranging from revisiting objectives and strategy to sharing the risk than their less effective peers.
  3. They adjust risk appetite and tolerances with frequency. Adapters adjust the risk appetite for all eight innovative activities listed in our survey, and most often when creating new products outside their core offerings and implementing new technologies.
  4. They harness new skills, new competencies and new tools to support innovation. While 58% of Adapters report that they are bolstering their risk management capabilities by adding new skill sets, just 39% of Non-Adapters plan to do this.  
  5. They monitor and assess effectiveness of risk management in multiple ways. 51% of Adapters use external parties to assess their risk management capabilities, while only 27% of Non-Adapters are monitoring their effectiveness in this manner.

 

Contact us

Jason Agnoletto
Partner, National Leader, Internal Audit Services, PwC Australia
Tel: +61 3 8603 2180
Email

Follow PwC Australia