1. Risk Scorecard Making risk visible and actionable….
Brett Knowles
CMA Foundation Thought Leader for
Performance Measurement
Performance Management
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2. Our clients have been profiled by the Thought-Leaders
Over the last 10 years, every book written by the founders of the Balanced Scorecard, Drs Kaplan and Norton have profiles our clients.

3. Four Clients have become Kaplan-Norton Hall of Fame Winners!
Hall of fame Winner – Quadrupling of share price, Growth 30% above industry, exceptional customer and employee satisfaction.
Hall of fame Winner – Fold increase in share price, ground-breaking development of intangible asset measurement, exceptional stakeholder satisfaction.
Drs Kaplan and Norton’s prestigious Hall of Fame award, presented by Kaplan & Norton to the best scorecards in the world.
Hall of Fame Winner – Breakthrough performance results including average annual revenue growth of 20 percent, net income improvement from $19.4 million to $100.9 million.
Datacraft
Hall of fame Winner – In three years revenues grew 8%, productivity 8.5%, and profit 27%. Customer satisfaction is up 13% and employee engagement is up 12%.

4. Risk Scorecard’s Location in the e-MAGs
Strategy
9) Strategic Management Practices
1) Strategy Model
Performance Metrics
2) Balanced Scorecard
Core Processes
3) Process Strategic Performance Analysis
6) Performance Dashboards
4) Strategic –Organization Design
8) Accountability & Compensation
Process Improvement Initiatives
5) Initiative Strategic Performance Analysis
7) Process Improvement Management
Risk Ledger
10) Risk Scorecard

5. The Risk Scorecard RISK ELEMENTS 1 2 3 4 5 6 7 8 A B C D STRATEGIC
GOALS &
PRIORITIES
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6. The Risk Scorecard RISK ELEMENTS 1 2 3 4 5 6 7 8 A B C D STRATEGIC
GOALS &
PRIORITIES
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7. The Risk Scorecard RISK ELEMENTS 1 2 3 4 5 6 7 8 A B C D STRATEGIC
GOALS &
PRIORITIES
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8. The Risk Scorecard RISK ELEMENTS 1 2 3 4 5 6 7 8 A 10% B 50% C 20%
STRATEGIC
GOALS &
PRIORITIES
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9. The Risk Scorecard RISK ELEMENTS 1 2 3 4 5 6 7 8 A 10% B 50% C 20%
STRATEGIC
GOALS &
PRIORITIES
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10. What benefit would this offer your leadership team?
The Risk Scorecard
What benefit would this offer your leadership team?
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11. Benefits to the Leadership Team
Visibility of the risks
Alignment around criticality of each risk
Ability to focus on the few
Actionable information
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12. What benefit would this offer your Board?
The Risk Scorecard
What benefit would this offer your Board?
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13. Benefits to the Board of Directors
Confidence in the Leadership Team
Visibility of risks
Alignment and support with the Leadership Team
Ability to focus on the few
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14. What benefit would this offer your Investors?
The Risk Scorecard
What benefit would this offer your Investors?
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15. Benefits to Investors Confidence in the Leadership Team
Visibility of risks
Ability to take risks into account when determining risk tolerance
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16. If you could build this next week, would you?
The Risk Scorecard
If you could build this next week, would you?
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17. Use case example
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18. strategy
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19. STRATEGIC RISK REGISTER
The Overall Process
STRATEGY
RISKS
STRATEGIC RISK REGISTER
RISK SCORECARD
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20. Frederick Industries Story
Southwest has been using a scorecard since the early 90’s
They are 4 times more profitable then the airline industry average
There success has come from having a clear strategy and sticking to it – at all levels and all locations.

21. Frederick 5% 5% 3% 15% 4% 4% 16% 5% 10% 15% 6% 4% 6% 4%
To be our customers’ supplier of choice by providing a quality product with exceptional service at a competitive price. v1
FINANCIAL
F1: Profitable Growth
F2: Low Cost Producer 5% 5%
CUSTOMERS
C1: Build Loyalty 3%
C2: Low Price
C3: Quality Product
C4: Great Service
15% 4% 4%
INTERNAL
I1: Continuous Improvement
16%
I2: Develop New Products
I4: Anticipate Customer Needs
I3: Improve Inventory Management 5%
10%
15%
ENABLERS
E1: Invest in Our People
E2: Embrace Change
E3:Promote a Safe Work Place
E4: Leverage Technology 6% 4% 6% 4%

22. STRATEGIC RISK REGISTER
The Overall Process
STRATEGY
RISKS
STRATEGIC RISK REGISTER
RISK SCORECARD
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23. Risk categories
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24. There are countless Frameworks…
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25. Strategic risk assessment
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26. Your Strategic Risk Assessment
STRATEGY
RISKS
STRATEGIC RISK REGISTER
RISK SCORECARD
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27. Strategic Risk Analysis
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28. Strategic Risk Analysis
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29. Strategic Risk Analysis
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30. Strategic Risk Matrix
Low impact/Low probability – Risks in the bottom left corner are low level, and can often be ignored.
Low impact/High probability – Risks in the top left corner are of moderate importance – if these things happen, you can cope with them and move on. However, you should try to reduce the likelihood that they'll occur.
High impact/Low probability – Risks in the bottom right corner are of high importance if they do occur, but they're very unlikely to happen. For these, however, you should do what you can to reduce the impact they'll have if they do occur, and you should have contingency plans in place just in case they do.
High impact/High probability – Risks towards the top right corner are of critical importance. These are your top priorities, and are risks that you must pay close attention to.
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31. Risk scorecard
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32. STRATEGIC RISK REGISTER
The Risk Scorecard
STRATEGY
RISKS
STRATEGIC RISK REGISTER
RISK SCORECARD
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33. Building the Risk Scorecard
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34. Pulling in the Impact Estimates
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35. Finding Leading Indicators
Leading indicator of that aspect of risk occurring.
In this example, a leading indicator of the ERP Implementation Failing on the Strategic Objective Profitable Growth might be:
ERP Customer Profitability Roll-up vs. non-ERP roll-up
ERP Revenue growth projections based on ERP numbers
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36. Graphing the Impact
Graphical representation of the leading-indicator’s projection of risk that is occurring with respect to that strategic objective.
(Strategic Weighting) * (Impact) * (Leading Indicator Performance)
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37. Understanding the Graphs
Even though they both have a risk-impact of four and a poorly performing risk indicator, because C4 has a weighting of 4% it has a shorter bar-graph than I1 with a weighting of 16%
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38. Looking at Each Risk
Providing the Predictive Indicator for each risk is the sum of:
(Strategic Weighting) * (Impact) * (Leading Indicator Performance)
across all strategic objectives.
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39. The Impact of Strategic Weighting
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40. The Impact of Strategic Weighting
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41. Key Risk Points
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42. © pm2Consulting.com

43. Next steps
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44. Next Steps 1. CMA Risk Scorecard 2. RiskScorecard.net
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45. www.pm2Consulting.com To learn more, please go to
Over 200 You Tubes and webinars on performance measurement and management
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