Evaluating risk for top-line growth and bottom-line protection: enterprise risk management optimization (ERMO)

Abstract

As a component of enterprise risk, risk management, in the past has primarily dealt with down-side risk or protecting the bottom-line. However, in the newly transformed, distributed digital workforce, business success requires a measured appetite for risk in order to achieve top-line growth. In other words, the real gap is the tools needed to evaluate both upside and downside risk when it comes to emerging technologies because the digital world in which all businesses must now operate for growth engenders inherent risk. This means that taking on risk is important for top-line growth as well as minimizing risk for protecting the bottom-line. Therefore, the real challenge is not in minimizing but optimizing risk and reward. In order to answer the question of how we can enhance topline growth and provide bottom line protection through optimizing risk a complementary risk/reward evaluation structure was created. The core components, key definitions and the connection with the previous foundation material will be explained. The risk optimization system was evaluated by business leaders that tested the framework by focusing on corporations across different industry verticals that utilized emerging technology impacted by both risk and reward.