After agreeing to the plan between Administration and pm2 Consulting, a facilitator conducted workshops. For the first pilot, three staff members from pm2 Consulting facilitated the workshop; for the second, the ERM Program Manager was the facilitator. For both pilots, permission for the participation of lead department staff was sought and received from the general manager of the lead department: for The Way We Move, Transportation Services; for The Way We Live, Community Services. Branch managers for strategic planning for both departments were tasked to provide subject matter experts from their staff for the entire workshop; each provided three to five staff members to bring department expertise. In addition, for steps 2 and 3 (risk Identification and Scoring), senior department staff, mainly branch managers, were asked to participate in scoring the likelihood and impact of risk events, and to add to or amend the list of risk events.
Exhibit 15.3 pm2 Risk Scorecard Process Diagram Source: pm2 Consulting, 2012.
Each of the workshops took approximately 60 to 70 hours to complete. To keep time commitments, some portions of steps that were deemed to be less critical were omitted.
Step 1: Identify Strategy
The first step in the process is to identify strategic direction. Edmonton had a 30-year strategic plan, The Way Ahead. Using input from the public as well as subject matter experts, The Way Ahead was approved by the City Council and is the key planning document for the city going forward. To assist in its implementation are the six Ways plans noted previously. These documents made strategy identification straightforward. For the first pilot, The Way We Move (transportation plan) was selected. It was considered the best place to start because it was the most homogeneous of the plans; responsibility for its implementation was overwhelmingly with one department, Transportation Services. As well, its format made it essentially a capital plan, with easily understood objectives and goals.
At this point the ERM team had to decide at what level the strategic weightings were to occur. Options included the six 10-year goals or the 19 strategic objectives, among others. It was decided that the strategic objectives would be the appropriate level of analysis for the risk register. The goals would be at too high a level to be meaningful, and other criteria would not serve the city's purpose in addressing the risk needs of the Ways.
Exhibit 15.4 Relationship between Strategic Goals and Objectives
Source: Adapted from pm2 Consultants Risk Score Card Model, 2012.
At this point a weighting of the goals was attempted. Subject matter experts, including the department general manager, allocated a percentage of support to each of the six goals. (It should be noted that, for political reasons, this weighting of the goals may be skipped as management may not want to prioritize these at this time.) The goals were then placed on the vertical axis of a table, with the strategic objectives across the top. An example of this table can be found in Exhibit 15.4.
For each strategic objective, the subject matter experts (in this case, four people from the Community Services department) indicated the link to each goal on a scale of 1 to 5. The larger an objective, the more goals it would relate to, and the higher weighting it would receive. When this was completed, each strategic objective had a weighting (C), expressed as a percentage, calculated as:
C = Σ (A × Β)/Σ all columns [Σ (A × B)] × 100
A = Goal weighting (expressed as a percentage)
B = Relationship to objective (1 to 5)
The sums for each column are added together to get a total weighting; the sum for each column is divided into this total to derive its relative weighting (in this example, 4 percent).
This gave each strategic objective a weighting. This weighting was then compared to that of every other strategic objective to arrive at a percentage of the total weighting. This kept the weightings constant in relative terms.
The objectives were then transposed to another table where they formed the vertical axis, then sorted by their percentage of the total objective weighting, with the highest weightings at the top. This allowed the group to select high, medium, or low weightings for each strategic objective. This categorization would be carried on to the next step, risk identification.