Why Risk Assessments Fail

Mitigating risk to the business is an essential leadership function.  The number of business failures may give us a clue to how many companies do it well.  Obviously it is more complex than that but I like to keep things simple.

The longer you stay in business the more you need an effective risk management process.

The facts are:

Over two decades, up to 75 percent of businesses in certain fields fail. Survival rates follow a universal downward trend, as the years of operation increase, with 50 percent of businesses failing after 5 years and 75 percent failing after 17 years, notes U.S. Bureau of Labor Statistics.

Between 1994-2010, the survival rates of private establishments ranged between 25 to 50 percent, reports U.S. Bureau of Labor Statistics.


Common Failure Points Within a  4-Phase Risk Assessment Process


  • Inadequate planning and communication
  • Lack of process alignment with strategic business activities
  • Misconception of participant time commitment


  • Focus on current or past risks rather than future risks
  • Generic rather than specific and tailored risk inventory structure
  • Using simple assessment tools for complex risks
  • Lack of defined perspective and timeframe leads to inconsistent responses


  • Ineffective or non- existent risk prioritization criteria and methods
  • Creation of unmanageable risk lists vs “TOP” risk profile (risk management is not list management)
  • Excessive elapsed time from initial identification to action results in “stale” risk list


  • Failure to communicate, validate and gain alignment of identified key risks with executive management
  • Ineffective reporting content and design
  • Incomplete or lack of comprehensive risk plans or incorporation into business decisions
  • Viewing the assessment as the end of the risk management process

Participant time constraints can be a barrier to successful risk assessment process.

The total time commitment for most senior management members involved in an annual risk assessment should not exceed six to eight hours. (PWC 2015)

How to Avoid These Common Failures and Improve Your Risk Assessment Process

screen-shot-2017-01-24-at-11-20-20-amWhen asked about the effectiveness of their risk assessment process many leaders see the need for improvement.

6 Triggers that Indicate a Need for Risk Assessment and Management Improvement

  1. Board of Directors or Sr. Executives question top risks and the framework to identify, understand, evaluate, report, and mitigate risks
  2. Challenging business or industry events or trends, and concern over how the risk management program would discover or address risks
  3. Changes in leadership structure, organization or business model
  4. Confusion over risk assessment process, roles, and responsibilities
  5. Strategic initiatives such as new market expansion, acquisitions or new product introduction create concern over ability of existing processes to address new types of risk
  6. Failure! has occurred and indicates a lack of ability to identify and mitigate a risk resulting in significant negative impact to the business

screen-shot-2016-12-29-at-5-35-56-pm6 Common Improvements to the Risk Assessment Process

  1. Reignite mature process (promote internal support and excitement – stop going through the motions.)
  2. Refresh of inputs to be current, relevant, and valuable
  3. Increase organization capabilities for conducting risk assessment activities consistent with driving results
  4. Reframe participants as customers of the process delivering value in better business decisions
  5. Refocus on the big things through better and effective risk identification and prioritization
  6. Create ACTION through better alignment, communication, and teamwork.  Why are we conducting this assessment? What is required? What was discovered? How can the risk assessment results support business decisions?  What action will we take as a result?

The most common failures concern taking ACTION.

  • Not knowing what action

  • The wrong action

  • No action

Do you need better inputs that drive action for your risk assessment process?



is an effective, productive way to gather insight from your organization and translate it to valued-added, action-oriented inputs to your risk management plans.

screen-shot-2017-01-24-at-11-47-48-amIt streamlines, and combines the best practices of brainstorming, sorting, rating, and analysis that translates qualitative data into quantitative results.  This facilitated process is made cost-effective and available through software support.



APPLIED GROUP CONCEPT MAPPING is an extremely flexible group process that creates action-oriented inputs for direct use in strategic planning, risk assessment, employee engagement process.

Ready to take action?  Call us to learn more.

Karen Dworaczyk
+01 (585) 820-7761
9 AM – 5 PM EST Weekdays


** An open letter to my HR Friends **

Dear HR Friends,

Fundamental for an organization to thrive and grow is having talented employees who are committed, motivated and engaged.screen-shot-2016-12-29-at-5-47-43-pmThis is an accepted conclusion of scores of studies on employee engagement, now a commonly overused buzzword with an entire leadership curriculum behind it. Research studies, as cited by Debbie Hance, Head of Business Psychology, Head Lamp, HRZONE.com – such as those by UK government’s 2009 review on employee engagement [1], Gallup [2] and the Corporate Leadership Council [3] –

“[Research studies] champion the transformational possibilities of engagement and seduce us with the promise of increased productivity, improved financial performance, lower attrition and absenteeism, and higher levels of customer satisfaction and innovation.

In the hopeful expectation of reaching this euphoric nirvana – where employees are more motivated, happier, more committed and more involved – many organizations have embarked on their own engagement journey … only to flounder on the rocks of disappointment.”

Yes! For most companies, there is difference between actual engagement and desired engagement.  Old response: Let’s do an annual survey! 

Avoiding the CURSE of the employee engagement process.

The truth is that the process of trying to achieve something positive and beneficial for employees can actually lead to disengaging them. Take for instance the employee satisfaction survey.  In most organizations, it creates exactly the opposite of what is intended.

In the annual survey, organizations ask questions about how employees feel about their work, their management, their working environment. Answering these questions exposes gaps.  Sometimes survey results are benchmarked vs. other organizations as if to say, “It’s ok if we are deficient or mediocre, so is everyone else”.  Once gaps are identified and no action is then taken to address these issues, employees become skeptical and are left feeling worse than they did before.  Essentially their expectations have been raised with the unspoken promise that something will be done with the results.  To add to the insult, the survey is repeated every year.screen-shot-2016-12-29-at-5-35-56-pm

Lack of action on important issues, after the survey, is a root cause of this engagement curse. There are at least four reasons I can think of for why no action is taken:
  1. Employee surveys don’t ask the critical questions that will pinpoint exactly what actions need to be taken. The questions are generic about attitudes, perceptions, and job satisfaction, but they don’t focus on the specific issues, activities or behaviors, that drive engagement, or the barriers that employees face to be engaged.
  2. Surveys don’t ask the importance (or other strength metrics) of each of the key areas that drive engagement. The results are often reported, and all are blinded by too much information. Everyone sighs, ‘hmm’.  As a result, no one knows where the real challenges lie or what actions are needed to take to improve the situation.
  3. Action and behavioral change is difficult to translate from a pile of raw data. Altering managerial behavior and company culture are challenging aspirations. Strong commitment and project management are required to effect change in organizations and these are rarely associated with engagement surveys. The survey doesn’t go far enough to tell management what to do next.
  4. Engagement is not perceived as a leadership issue.  Employee surveys are usually driven by HR practitioners who believe in their potential. As a result, practitioners treat engagement measurement as a standalone activity, sometimes conducted by an external entity. It is separate from other talent management initiatives and not tied to management performance metrics. The survey becomes just a tick-box exercise for management and employees. No one is held accountable for change.  HR may even be blamed for the lack of engagement initiatives or improvement in satisfaction metrics overtime.  (Quick!  Bring in the HR event coordinator!  Again, the company sponsored event strategy for improving employee satisfaction can backfire and have the opposite effect on boosting engagement.  But that is another story for another time.)

What is the answer?hands-up

The answer is to turn these negatives around:

  1. Ask employees what is important to them and listen to their input. Of the universal areas that fundamentally effect how people feel about their work and their employer, key areas that are common are wellbeing; motivation; reward and recognition; involvement; autonomy; teamwork and collaboration; purpose and meaning; relationships; trust; career/personal development; communication and performance management. What specific actions can the organization take to improve these areas?  Are there other important areas specific to your organization or industry that call for unique action?  Ask and listen.
  2. Assign practical action at three levels:As a part of performance metrics, senior executives, line managers, and individual contributors are responsible for organization satisfaction. To initiate behavioral change, prioritize a small number of personalized, easy-to-implement actions in critical areas, in each of these organizational levels to improve and embed engagement.  This can create a more conducive work environment and improve any areas of disengagement. Even small changes can make a noticeable difference in attitude and productivity, leading to general increased satisfaction.
  3. Clearly hold senior management accountable for engagement and everyone in the organization responsible for personal action. Engagement should be driven by leaders and managers, with HR providing support, and ultimately everyone’s responsibility. Line managers have an influence, and employees need to recognize that they choose their own attitude. Everyone should be free to implement their own ‘engagement actions’.

Engagement may be a concept that builds on commitment, motivation, and job satisfaction. It is fundamental to the psychological contract and the employment contract that is defined as ‘work’.  No doubt: it can pay dividends for organizations who do it well.employee-satisfaction.jpg

About Applied Group Concept Mapping

The key to breaking the curse of engagement surveys is to gather important employee insight and to prioritize specific, practical, manageable actions that senior executives, line managers and individuals can take to drive engagement levels higher.

APPLIED GROUP CONCEPT MAPPING is a brilliant process that can translate employee insights into action-oriented plans that drive engagement and satisfaction.  It works because of four key benefits:

  1. Active employee engagement
  2. Emergent and open ended input
  3. Data-based methodology
  4. Value-added action-oriented results that feed directly into planning.

Take employee satisfaction and engagement to the next level with APPLIED GROUP CONCEPT MAPPING.  Call us at INSIGHTOVATION®, 585-820-7761.  Visit us at APPLIEDGROUPCONCEPTMAPPING.COM


Karen Dworaczyk and your friends at INSIGHTOVATION®

[1] MacLeod, D. and Clarke, N. (2009), Engaging for Success: Enhancing Performance through Employee Engagement. Department for Business, Innovation and Skills. London.

[2] O’Boyle, E. and Harter, J. (2013), State of the American Workplace. Gallup Inc. Washington DC.

[3] Bedington, T., Smith, D. and Chung, J. (2004). Driving Performance and Retention Through Employee Engagement. Corporate Leadership Council. Washington DC. (Catalog no.: CLC12PD3N8).