“We have to change the mindset of risk management. If you ask people, ‘Why do we have brakes on cars?’ most people would probably answer, ‘to slow the car down.’ For business, the answer is ‘So we can go faster,’” Gary Lynch says. “We don’t manage risk by itself; it’s part of the process. Effective risk management can make us go faster by creating competitive advantages.”
During an exclusive on-camera interview at the annual AIAG Supply Chain Summit held June 20, 2017, in Livonia, Michigan, Lynch shared some of the advice he gave during his presentation.
“There are two things the industry has to focus on. One, how to take the work they’ve already done, the data, the information about risk and convert it into something of value in the market, something they can use as a competitive advantage,” Lynch says. “And, two, don’t stop at resiliency. Resiliency is an incomplete strategy. It’s admitting that we’ll go back to the way we were, but we have a chance to be better. Why don’t we exploit that?”
Lynch is founder of the Risk Project, a global risk advisory and research firm that uses performance-based approaches to identify, assess, and manage risk exposures. Author of two books on risk management, Lynch drew from real-life case studies to help attendees explore the best strategies for risk management and identify expected outcomes.
“The evolution of standards must change the thinking to go beyond just checking the box,” Lynch says. “Standards are the starting point. If you comply with just that, you’re not doing enough.”
AIAG members can access the 2017 Supply Chain Summit presentations at www.aiag.org.