Actions

Actions are the specific steps taken to implement a risk strategy, aiming to adjust risk exposure and/or risk capacity. By this stage, you've set your goals, established timelines, identified risks, forecasted goal attainment, and chosen a risk strategy. Now, it's time to select the most effective actions to achieve your strategy. The choice of actions should be based on their impact and the cost of implementation.

For example, if your risk strategy involves reducing risk exposure for specific goals, you need to identify actions that accomplish this. Reducing ambition lowers the number of external risks and frees up risk capacity. This might reduce the need for reorganization or efficiency measures. The key is to ensure that the reduction isn't too significant or too minimal to have an effect.

Types of actions

There are three types of actions that most impact goal risk states:

  1. Adjust Ambitions (Risk Exposure)
    Higher ambition requires more risk capacity; lower ambition requires less.

  2. Adjust Leadership Behavior, Culture, and Values (Risk Capacity)
    Aligning these aspects with the goal's risk state can free up risk capacity and influence leadership maturity.

  3. Manage Risks—External and Internal Threats and Opportunities (Risk Exposure and Risk Capacity)
    Greater risk exposure demands more risk capacity to manage external risks. Internal risks can lower risk capacity, affecting the ability to handle external risks.

Forecasts must be updated to ensure the right actions are prioritized for implementation. Remember that an action with a long timeline won't impact short-term forecasts.

Actions can be large-scale projects or simple adjustments within departments or organizational units. The right approach depends on the expected impact and cost-benefit analysis. Sometimes a mix of actions is needed to achieve the desired risk strategy.

Below are suggested actions based on your goal’s risk state. The actions are focusing on leadership, culture and values. The methodology also includes actions for other topics.

  • Dire

    Priority 1

    We're in a dire risk state and need to scale back our goals.

    If our projections show we’re below the threshold, with strong evidence indicating a high chance of failing to meet our goals, we need to change our approach. Here’s what leaders should do in this scenario:

    • Quickly address the situation, analyzing missteps to understand why goals are likely to be missed, and identify any underestimated or overlooked risks.

    • Communicate any revised goals across the organization, clearly explaining what will benefit the business in the short and long term.

    • Ensure leaders and the organization learn from this experience, using these insights to improve future operations.

    • Encourage a positive attitude toward temporary setbacks.

    Leadership Behavior

    Promote openness and trust, showing that leaders are learning and taking steps to improve.

    Keep everyone updated on progress, helping to retain employee confidence.

    Organizational Culture and Values

    Recognize and accept mistakes, focus on building competence, develop a culture of continuous improvement, and celebrate successes.

    Emphasize values like trust, safety, fact-based decision-making, evaluation, analysis, role clarity, competence, learning from experience, delegation, and organizational growth.

  • Pessimistic

    Priority 2

    We're in a pessimistic risk state and need to intervene and investigate the sources of potential failure.

    When the risk outlook is pessimistic, leaders need to intervene and take a comprehensive approach. Recommended steps include:

    • Gain a full understanding of the situation at every level—from the board and management to the rest of the organization.

    • Use a two-step approach: Get an overall view of the company's situation and challenges, then dive deeper to identify specific issues and find the best solutions.

    • Be concrete and use specific examples to help stakeholders understand what went wrong, what's at stake, and what corrective actions are needed. This clarity helps reassure the market, shareholders, and employees.

    • Set clear expectations for roles and responsibilities, and ensure leaders accept their part in achieving new goals.

    • Lead by example—show that leaders listen, learn, and adapt.

    • Protect critical areas from disruption, whether they're business-critical or performing well.

    • Identify projects or areas that can generate positive results quickly.

    • Conduct skill development and lessons-learned sessions.

    • Measure, evaluate, and provide specific feedback.

    • Highlight successful outcomes and best practices.

    Leadership Behavior

    Rebuild trust and optimism through open communication, involving people, and achieving results.

    Organizational Culture and Values

    Listen to employee concerns, consider their feedback, and involve them in decision-making.

    Rebuild trust in leadership through transparency and honesty.

    Share both successes and setbacks openly, without hiding information about risks or failures.

    Foster values like safety, transparency, financial stability, predictability, inclusion, trust, and effective communication.

  • Optimistic

    Priority 3

    We are in an optimistic risk state, needing to validate our sense of harmony.

    To manage this situation, leaders should:

    • Assess if a reality check is needed. Management might be compensating for weaknesses by working excessively hard to meet deadlines.

    • Foster a shared understanding among stakeholders to build a common perspective.

    • Shift the organizational culture toward structured practices with systematic data collection, milestone-based delivery analysis, and thorough evaluations.

    • Standardize processes and methodologies to identify key risks, conduct collective analyses, and understand the causes of successes and failures.

    Leadership Behavior

    Develop a leadership style based on trust in management's decisions, with a focus on optimism and acceptance.

    Organizational Culture and Values

    The organization might suffer from poor information flow and delayed feedback between management and staff. To address this, emphasize optimism, trust, development, autonomy, and minimal micromanagement.

    Promote evidence-based decision-making, analytical thinking, clear role definitions, performance tracking, continuous improvement, and skill development.

  • Potent

    Potent

    Priroity 4

    We are in a potent risk state and need to explore the opportunities.

    When dealing with a potent risk environment, leaders should:

    • Embrace differing opinions and criticism

    • Prioritize growth and development

    • Foster a sense of security and motivation

    • Inspire others with a grounded leadership approach

    • Build strong internal and external relationships

    • Promote openness, continuous improvement, and innovation

    • Explore new opportunities to drive the business forward

    Leadership Behavior

    Builds relationships within and outside the organization, focusing on continuous improvement and seeking new opportunities.

    Organizational Culture and Values

    Develops the business, employees, services, products, and market presence.

    Emphasizes values like competitiveness, achievement, continuous improvement, innovation, and relationship building.

  • Defensive

    Priority 5

    We are in a defensive risk state and need to increase our ambition level.

    When facing a defensive risk state, leaders should:

    • Build confidence among skeptics and those adhering to established practices.

    • Validate existing practices and clarify current influencing factors.

    • Allow skeptics to ask critical questions and develop new goals collaboratively.

    • Prioritize focused initiatives over many and ensure thorough measurement.

    Leadership Behavior

    Incrementally build trust and integrate conflicting views.

    Organizational Culture and Values

    Cultivate a culture that manages resistance and promotes values like security, openness, patience, and inclusion.

  • Harmonious

    Priority 6

    We are in a harmonious risk state and need to secure goal achievement

    When facing a harmonious risk state leaders should:

    • Understand the market and know the company's competitive strengths and position.

    • Adopt a hands-on, responsible leadership style.

    • Keep ambitions and goals realistic and balanced.

    • The board and management should assess opportunities and risks before initiating new projects, and closely monitor ongoing developments.

    • Lead with a focus on goals, results, and quality, while seeking continuous improvement.

    • Stay focused until all goals are achieved.

    Leadership Behavior

    Be goal-oriented and drive continuous improvement.

    Organizational Culture and Values

    Foster a fact-based culture that implements improvements, measures progress, and tracks competitors. Emphasize values like responsibility, realism, balance, quality, competitiveness, and oversight.