10 oktober, Partos Plaza, Magda Stepanyan

1. Risk Management for
Development Interventions:
mobilizing efforts to embrace the
change
Magda Stepanyan
m.stepanyan@risicomanagement.nl
1www.risicomanagement.nl
20 juni 2013

2. Who we are
Who we are
The Nederlands Adviesbureau voor Risicomanagement (NAR)
is an independent organization which is specialized and purely
focused in the field of risk management. We offer a total
package of products and services that will enable your
organization to manage its risks independently. The complete
package consists of advice, software (NARIS), together with
training and coaching (at the Risk Management Academy).
We work in many different markets within public and privet
sector. We are fully committed to support non-governmental
organizations to improve their performance by managing
uncertainties. In 2012 NAR has established a partnership with
Partos and VFI with the purpose to develop capacities within
the Dutch development/charity/humanitarian sector.
2www.risicomanagement.nl

3. Who we are
Magda Stepanyan, MA, MSc, CIRM
Who we are
Expertise: Over 15 years of management and consultancy
work in the field of development cooperation, disaster
and climate risk management, monitoring and
evaluation.
Worked for: EC, WB, UNDP country offices, UNDP
regional Centre in Bratislava, UNISDR, IFRC, Cordaid, etc.
Geographic focus: global with a primary focus on CIS/CEE
region.
3www.risicomanagement.nl

4. The only thing that is constant is
change….
Heraclitus
4www.risicomanagement.nl

5. How should we deal with this uncertainty?
1. Ignore: ‘planning paradox’, linear cause-effect
relationship
1. Embrace: flexible result chain, move from
stable and predictable environment to a
dynamic environment with many parties (known
and unknown), indicative planning, looking for
opportunities
5www.risicomanagement.nl

6. Embrassing uncertainty
‘A Country Partnership Framework and a Bank’s
reorganization without clear, explicit, and
fundamental consideration of risk and risk
management would suffer from the “planning
paradox” of making plans while ignoring uncertainty’.
Norman Loayza
Director of the World Development Report 2014
WB
6www.risicomanagement.nl

7. Growing attention to managing risks
Growing attention to managing risks
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Busan Partnership for Effective Development Cooperation, Fourth High Level Forum on Aid Effectiveness,
2011
OECD Aid Risks in Fragile and Transitional Contexts
USAID Resilience Policy, 2012
EU Risk Mapping, 2010
WB, World Development Report 2014
UNDP, Capacity Development Facilities (CDF)
Publieke managementletter voor de Goededoelensector:
Goed doel, goed verhaal
(Aanbeveling: Doorloop in de organisatie een zorgvuldig proces voor het
juist inrichten van het risicomanagement.)
Development work must internalize risk!
7www.risicomanagement.nl

8. Some basic definitions
8www.risicomanagement.nl

9. Key concepts: establish baseline and common language
Risk:
 Effect on uncertainty on objectives (ISO Guide 73)
 Combination of the probability of an event and its
consequences (IRM definition)
Uncertainty:
Uncertainty describes the quality of our knowledge concerning
risk.
Risk management:
Coordinate activities to direct and control an organization with
regard to risk (ISO 31000)
systematic, continuous, taking vs. managing risks
9www.risicomanagement.nl

10. 10www.risicomanagement.nl
GEVOLGEN
GEBEURTENIS
OORZAKEN
How to descrbe risk
How to describe risk

11. How to descrbe risk
How to describe risk
11www.risicomanagement.nl

12. Risk Identification
Risk Identification: typology
Risk identification categories:
One-off risks vs. Repetitive
Bruto risks vs. Netto risks (after response measures)
Strategic (speculative)risks vs. Control or Operational (project)
risks vs. Hazard (puur) risks
Risk identification areas:
Activiteis
Departments
Programme
Project phases
Partner
Network
Sector
Etc.
12www.risicomanagement.nl

13. Growing attention to managing risks
Growing attention to managing risks
Development work must internalize risk!
a) Institutional
(setting the development agendas, developing
and implementing policies and programming)
b) Organizational
(effective, efficient, and relevant realization of
developmental objectives)
13www.risicomanagement.nl

14. Interesting example of risk assessment
and horizon scanning
Example
Risk management for policy making
A Leading Centre of Expertise in Strategic Anticipation for
National Security
http://app.rahs.gov.sg/public/www/home.aspx
14www.risicomanagement.nl

15. Trending risks in development sector
Group Exercise: 15 min
What are the trending risks in the
development sector?
15www.risicomanagement.nl

16. Why proactive risk-taking is still a
challenge?
16www.risicomanagement.nl

17. Fundamental challenges
Fundamental challenges
1. A culture of blame vs. learning from failure
“I have not failed, I have found 10,000 ways that
do not work”, Thomas Edison
2. Lack of adaptive capacity on the part of
development organisations vs. embracing
opportunities
3. Lack of a shared concept of risk management
vs. institutionalizing risk management
17www.risicomanagement.nl

18. Why risk culture is important?
Do you know that …..
The more hierarchical is the culture in the country where
the pilots are from, the more submissive are the co-pilots
and the larger is the number of incidents*
* Source: Boeing research on airplane crash incidents
18www.risicomanagement.nl

19. Why risk culture is important?
Risk Culture and Risk Perception
Risk culture defines:
- organization’s attitude towards risk management
- how staff members
- feel obliged to behave
- regarding risks
- how open staff
- members talk about
- risks (threats and
- opportunities) within
- the organization
19www.risicomanagement.nl

20. Why risk culture is important?
Elements of risk-aware culture:
Strong leadership
Involvement of all stakeholders (!)
Training in risk management and learning from
events
Communication and openess on all risks
Absence of an automatic blame culture
20www.risicomanagement.nl

21. Engagement: Mobilizing efforts:
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22. Risk Identification: Risk Perception
Risk Identification: Risk Perception
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23. Managing risk
Managing Risk for Better Results
Video on Marshmallow Challenge
http://marshmallowchallenge.com/Welcome.ht
ml
23www.risicomanagement.nl

24. Risk Capacities
Remember to ask!
 What are our risks?
 Whose risks matter: whose threats and
whose opportunities?
 Are we aware of the risks of our partners?
 What implications the risks of our partners
may have for us?
24www.risicomanagement.nl

25. Managing Risk for Better Results
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Risk Capacities
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25www.risicomanagement.nl
Ensure a policy environment that is favorable to
proactive risk management as a measns to improve
performance.
Encourage organizations to darw up their risk
overview based on an assessment of how critical the
risks are to the organization (likelihood/impact)
Allocate resources for risk management in the
organization
Develop risk management capacities among staff
members
Ensure risk-based planning and risk-based decisionmaking
integrate risk management into the overall approach
to change management.

26. Partnership: NAR/Partos/VFI
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Risk Capacities
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26www.risicomanagement.nl
Risk maturity survey: we measure the level of risk maturity in
the Dutch charity sector;
Risk Management Knowledge Hub: we set up a sector-specific
Knowledge Hub to steer and customize the application of risk
management in the sector.
Capacity development: we offer an extensive portfolio of
training programs, workshops, round-table discussions,
symposia, etc.
Trending Risks: we regularly share our understanding of the
trending risks in the sector.
Risk Management Database: we develop a sector-specific
database to enable cross-sector comparison and learning.
Risk Management Information System – NARIS: we make our
risk management software available free of charge to all Dutch
charity/development /humanitarian organizations to support
their operations and ensure effective management of their
risks.

27. Useful resources
Useful resources
 NAR MVO:
www.risicomanagement.nl/mvo.html
 The Broker: Blog on Risk Management
www.thebrokeronline.eu/Blogs/Riskmanagement-for-development
27www.risicomanagement.nl

28. Thanks!
Magda Stepanyan
m.stepanyan@risciomanagement.nl
28www.risicomanagement.nl