visual_manager_550x330_2800The Visual Manager Software offers a new software supported process oriented approach to improve the quality of organizational risk-assessment, and goes hand-in-hand with already established processes and systems. It solves three challenges which will be discussed in this article.
In corporate risk assessment practice, there is a lack in visually supported methods. The use of more narrative representation formats, such as visual metaphors or effective sketching (http://www.sketchacademy.com) is neglected. The existing risk mapping methods are good for analytical purposes and quantitative risk assessment, but not very useful to facilitate an assessment in a group, for example the board of management and the executive board. Furthermore, the existing risk visualization methods are very technical and not too useful for internal communication purposes.
How is risk management typically being done today? The responsibility of corporate risk management lies in the hand of the board management. They are responsible for identifying, evaluating, and assessing the most important risks, as well as deriving actions to handle these risks. The implementation of such measures is the duty of the executive board which normally delegates to a few risk managers in the organization. These experts generally implement a technical risk management process and technical systems. When there is a board meeting, they provide the information for the decision making process in this meeting. Normally, they have to synthesize all the information from these systems, assess if manually collected information can be true, and write a report. Often they also use a visual risk map to reduce the complexity and increase rapid understanding.
What are the three main challenges?

Firstly, Getting the Big Picture: The risk management systems have to generally handle, in greater detail, more complex systems. At the same time, the situations are changing faster. There is a risk in many organizations that people measure every detail but lose the big picture. It can be very dangerous if people only rely on such technical systems and neglect their experience and intuition. How can a tool provide the Big Picture? And how can a tool present it on large touch displays, such as the ETH Value Lab.

The second challenge is Group decision making: More and more stakeholders get involved in the risk assessment process, such as the board of management, the executive board, the auditing firm and others. All of them have diverging backgrounds, perceptions and experiences. How can the quality and involvement in a risk assessment meeting be increased? Research has shown that visualizations can be very useful for the coordination of a group and for group decision-making.

Thirdly, Creating risk reports: Let’s take the country of Switzerland as an example to explain this point. According to a new Swiss regulation (“Art. 663b Ziff. 12 OR”), Swiss companies must provide a risk evaluation as one part of their annual report, and the auditing firm has to verify that the company has a risk management and internal control system (Art. 728a OR). The auditing firm has to assess the risk management and inform the board of directors of the company with a detailed report on the finances, the internal control system as well as the result of the revision. However, there are no best practices on how to create such risk evaluations together with the responsible people. As a result of this, we were motivated to develop a process-oriented approach that can ease communication between the auditing firm, the risk manager and the management and executive board.

For all these challenges, the Visual Manager provides a viable solution.