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The ERM process was built with GM's vision in mind: to design, build, and sell the world's best vehicles (see Exhibit 34.1). The process itself was geared toward the identification and management of key (potential "killer") risks. The ERM team assisted line management in developing a list of top company risks, identifying risk owners, assisting management in the development of risk mitigation plans in conjunction with the management teams, providing ongoing monitoring, and reporting results to senior management and the board.

The scope of GM's initial ERM program intentionally did not fit the typical ERM definition of an all-encompassing, holistic approach. As a bottom-up implementation, senior leadership wanted ERM to focus on those elements of risk and opportunity that were most important to the company. We at GM have since enhanced our program with additional high-impact features, which are detailed later in this chapter.

Overall, however, our approach was to move away from the typical ERM view, which focuses on "what can go wrong." We took a more actionable view of "what can go right," placing emphasis on both opportunities and risks, to ensure that we were leveraging our ERM program to be well-positioned in the industry.

Lessons Learned: Identifying Risks

A critical success factor that has been a part of our program since inception has been to continually seek out several views, including views from sources outside the company, of risks that the industry and company may face. In addition to regular meetings with our risk officers, we conducted a number of focus groups and

GM Risk Management Process

Exhibit 34.1 GM Risk Management Process

workshops to gain insight into potential blind spots that may exist, and to capture various views on emerging risks. To solicit this information, we reached out to deep thinkers and those with broad business experience both within and outside of our organization and sought input across demographic groups, including Generation Ys or recent college graduates and young professionals.

The careful attention devoted to capturing several perspectives from various demographics, both inside and outside of the organization, has led to some great successes and has consistently influenced the composition of our top risks list. Our commitment to seeking out diverse views has helped us to avoid confirmation bias,[1] and helped us to ensure that we are not seeing our world through rose- colored glasses.

  • [1] Confirmation bias is the tendency of people to favor information that confirms their beliefs.
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