Impact Measurement & Management and Risk Management: What are the risks involved in impact creation?
Previously, in one of our blogs, we talked about risk management and why it assumes such importance for organizations. For impact organizations, risk management and mitigation are crucial not just to stave off potential legal actions, fines, penalties, et cetera, but also to eliminate any bottlenecks, threats in the face of impact creation.
For impact organizations, an understanding of risks is crucial. All the strategizing, planning can go in vain if the impact journey is disrupted by sudden, untoward circumstances. This calls for the need to study the risk factor involved in impact creation. Therefore, while measuring and managing impact, it is also necessary to take into account all sorts of emergent, existing and potential threats and risks.
Risk management while measuring and managing impact involves accepting the possibility that the desired impact may differ as opposed to what was expected. Risk management and mitigation for impact creators involve asking pertinent questions and working on the results accordingly. What are the risks involved in impact creation? How can the same be evaluated and mitigated?
Risk assessment, management, and mitigation can be carried out by:
Identifying the type of risk
Impact risk types are categorized on the basis of the stakeholders involved and what aspects of impact creation are affected, among others. For example, efficiency risk stands for gauging the possibility that a said impact could be achieved by deploying fewer resources. Stakeholder risk denotes the inability to meet their expectations or the rise of some misunderstanding with the said group.
Gauging the level of impact risk
Risk assessment involves mapping the likelihood of a risk occurring, the consequences, and the magnitude of the same. Risk can be classified from low, medium to high. The task here is to address and understand the ‘what’, ‘when’, ‘how’ and ‘how much’ associated with the potential risk.
Devising a mitigation strategy
One of the parts of risk mitigation is scenario analysis – if changing an event, situation, resources or input will change the outcome, thereby culling the risk. Based on a thorough understanding of the risk and the contributing factors, an enterprise can co about making relevant changes ranging from tweaking the business model, giving an overhaul to the ToC, changing prices, hiring staff, extending or shutting a campaign, among others.
Artemis Impact Platform is a one-stop solution for all concerns tied to impact creation and measurement. The platform offers both a top-down and bottom-up approach for impact measurement and allows more transparency and accountability in CSR and sustainability.
Effective risk management can ensure that untimely and unforeseen threats and challenges don’t pose hurdles and unwanted bottlenecks in the face of impact creation, thereby benefiting the impact organization, its stakeholders, society, and the planet at large.
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