Open Road Alliance, a leading organization that conducts research and collaboratively develops tools to enable all organizations to adopt risk management practices, has partnered with Vera Solutions, a mission-driven social enterprise, to create effective tools in risk management. Representatives from both companies held a Webinar to showcase live Demo of the Salesforce-based risk management tool. The full webinar recording is available here.

My goal is to summarize the webinar and contribute to the risk management field that is slowly becoming an imminent part of project management work in international development. The idea behind this is to make risk management a common practice to maximize the impact. According to Maya Winkelstein, an Executive Director of Open Road Alliance, Risk Management is exactly at the stage where impact management was 10 years ago.

Vera Solutions has already created a program impact measurement tool based on Salesforce – Amp Impact. Recently, the company made some adjustments to improve the tool and added a new feature that will simplify risk management practices among various portfolios.

Risk Management 101 – Why it is important

During the webinar, Maya Winkelstein dived into the risk management definition and practices. According to her, things go wrong all the time and the world is not prepared to deal with it. We could think of Open Road Alliance as the emergency room for impact. However, then there is another part of ORA’s work that could be described as preventative medicine around risk management.

Currently, 76% of donors don’t ask what could go wrong with the work of their grantees; 83% of funders don’t have a contingency budget for when things go wrong; 65% funders don’t have the policy to govern grants-off cycle or provide additional funds in case of need. These numbers are alarming when thinking about impact.

What is the risk? – at the subjective level it could include Financial risk; Reputation risk; Governance – i.e. compliance or IRS law; and finally, the Impact risk (risk to impact).  At the objective level, this could include the risk to Portfolio; Grant; Enterprise; Program; Country; Project.

Risk management is a continuous process because we can never fully eliminate all the risks.

Key elements of Risk Management include:

  • Likelihood/probability of the risk occurring
  • Severity of harm/ degree of consequence
  • Influence/control in terms of risk mitigation
  • Predictability – being able to predict whether the risk will occur or not

Steps we can take to manage risks:

  • Identify what could go wrong
  • Identify mitigation strategies
  • Planning for contingencies
  • Repeat the cycle / continuous learning

Leveraging technology in the Risk Management process

How can we use technology to help organizations solve their challenges, including risk management?

According to Vera Solutions’ Zak Kaufman, many organizations are stuck with spreadsheets such as Excel, Google sheets when managing data and information flow. Vera Solutions is introducing a new platform-based solution. First-generation risk management software was developed with the feedback of six foundations. The foundations represented diversity among funders, such as corporate, institutional, family foundations, etc. The aim was to design a tool that could work for everyone, any type of the donor. Vera Solutions’ philosophy was to start simple and listen to the needs of different foundations.

During the webinar, Zak introduced a live Demo in Salesforce. To summarize, the platform dashboard includes open risks broken down by project or portfolio; risk events during the last 12 months; risk assessments by period and status; all risks by category, by status, etc.

The platform has a Risk Register. This is usually set up during the risk identification stage. The register includes risk name, status, category, priority, potential impact, proximity, degree of control, everything color-coded and easy to understand. For example, one of the risks could be that the grantee may delay the submission of impact data. The probability of this risk manifesting into reality is high. However, mitigation strategies that might be deployed include financial or technical assistance as an example, or simply sending email reminders if the report is late. This would be noted under the one platform.  

There is also a Risk Assessment tab at the level of individual risk. There is an option to include a narrative assessment that could go into far more detail. It could provide rich narrative information on what happened from internal or external users. Users have the ability to build out a template for narrative assessment as well as narrative grant reports, capacity assessments, almost like questionnaires. The templates can be downloaded to the Desktop as word documents.

Overall, leveraging technology to switch from spreadsheets to a more sophisticated, standardized platform is a huge step in making Risk Management a common practice among donors/funders. For more information about the work of Open Road Alliance in Risk Management practices, please visit the company website. If you would like to hear more about the risk management tool discussed above, please click here.