Risk-Based Performance Management
We wrote the book on Integrating Strategy and Risk Management, via Risk Appetite
Risk-Based Performance Management (RBPM) is a strategic management framework designed to enable firms to execute their strategy sustainably while operating within their risk appetite boundaries.
By integrating best practices approaches from the fields of enterprise performance management, enterprise risk management and risk appetite, RBPM enables the board and senior management to understand, manage and control the risks facing their firms while building the capability to identify and exploit emerging opportunities to gain and maintain a competitive advantage.
The sin is not to take a risk, but to take a risk that we don't understand and cannot manage.
Risk-Based Performance Management, Integrating Strategy & Risk Management
“Risk is not bad per se. We will always look to take risks because that is what it is to be creative and innovative and secure competitive advantage. The sin is not to take a risk, but to take a risk that we don’t understand and cannot manage. That is our challenge and our opportunity. And Risk Based Performance Management is the starting point.”
Dr Jonathan Chocqueel-Mangan, Managing Director, Tyler Mangan Consulting Ltd
Risk-Based Performance Management is a must read for all Strategy Execution practitioners. The book has made a tangible contribution towards successfully integrating Enterprise Risk Management with Enterprise Performance Management. Key concepts like defining the risk appetite, aligning risks, risk maps, KRIs, KCIs, RACI model, among many other, are thoroughly explained (and demystified).
Rafael Lemaitre, Partner, ShiftIn Partners, United Arab Emirates
Risk-Based Performance Management combines a sound conceptual framework for Strategy, Performance and Risk.
The RBPM approach combines a sound conceptual framework for strategy, performance and risk, underpinned by experience and evidence of its use in real business situations, with an effective toolset for the implementation of the framework in your business. The concept of risk appetite, for long the problem child of risk management frameworks, provides the glue to link the elements of the framework and allows the business to monitor its risk exposures - not only preventing excess risk, but also providing insight as to when the business is not taking on sufficient risk to maximise opportunity.
The best handbook I have read on Risk-Based Performance Management, and it should be mandatory reading for all managers and students. It provides a clear and concise guide to managing risk successfully in a continuously changing and challenging environment which confronts every business in the twenty first century. It equips the manager with the knowledge, tools and road maps to successfully develop and implement RBPM in their organisation as part of their overall strategy for success. To quote the authors, ‘risk can no longer be divorced from strategy…’ and those managers who embrace this reality will be the winners.
Kieran Rigby, CEO, GAB Robins Group, United Kingdom
Risk-Based Performance Management is “cringingly obvious”
I couldn’t tell you how many meetings I have attended in my career where we have discussed risk management, but I can’t recall any meetings where risk management and business strategy were intrinsically linked items on the agenda. Market Risk, Credit Risk, Operational Risk, etc, all had their place in the catalogue of committees with dashboards providing an overview of limits and indicators to the board; however, the translation into the realisation of the business strategy was never apparent. The approach proposed in the book Risk-Based Performance Management is both relevant, insightful and often cringingly obvious.
Rick Warley, Managing Director, Rabobank, United Kingdom
Risk-Based Performance Management puts Risk and specifically risk appetite, at the heart of strategy execution.
Risk-Based Performance Management: Integrating Strategy and Risk Management introduces a new model for, as the title suggests, placing “risk, and specifically risk appetite, at the heart of strategy execution.” This integration of risk into strategic management through the common media of risk appetite, demonstrates that risk management a core element of successful performance.
As such, I can see, finally, that here is model that can provide risk practitioners with the ammunition they need to show the value of risk management and make a decent return on investment case for the Board; and strategy managers with the framework they need to ensure they are more cognizant of the risks they have, how much risk is required or acceptable to have in place, and importantly more adaptable to shifts in the strategic landscape so as they can prosecute their strategy successfully.
The Risk-Based Performance Management framework, which, as the authors are keen to point out, is a “strategic management methodology, not a risk framework”, has the potential to bring risk management out of the depths of despair and put it front and centre on the Board agenda. Through RBPM, risk can finally be viewed as a positive business discipline …. That by setting a robust strategy and risk appetite and by investing more than the tiniest amount possible, which in my experience is the norm to comply with regulations and satisfy the bare minimum of stakeholder expectations, you can achieve a good risk management posture, align your risk portfolio to your risk appetite, so that you can actually improve a business’s strategic and operational performance.
Colin Lobley, Cyber Risk Consultant, United Kingdom
Risk management has been often overlooked in strategy literature despite its immense importance. Smart and Creelman argue convincingly why, and in the light of recent crises, risk management and strategy should be integrated and show how.
Professor Hasan Cavusoglu, Ph.D. Sauder School of Business, Canada
Risk-Based Performance Management delivers the comprehensive tool-set
RBPM delivers the comprehensive tool-set that business leaders have desperately needed since the financial crisis—one that fundamentally intertwines risk management with business performance management during decision-making, rather than treating them as separate exercises. I was genuinely excited to explore this seven-component framework with risk appetite at its core, particularly when I realized how powerfully it resonates with my own thinking: that truly sustainable business strategy requires the continuous validation of objectives pursued against risk appetite allocated, and the ongoing verification that risk taken aligns with appetite prescribed. The book clearly explains both the conceptual evolution and the practical deployment approach, making readers eager to adapt the implementation to their own environment. This isn't just essential reading—it's a necessary cultural foundation for any business attempting to compete and succeed in today's complex, post-crisis landscape.
Amer Shashati, Enterprise Risk Consultant, Saudi Telecom Group, Saudi Arabia
This excellent book provides a robust framework and methodology for integrating strategy and risk management.
While the CEO of a financial services organisation, I was introduced to principles of Risk-Based Performance Management through a consulting engagement with Andrew Smart and his team. We gained much from the experience. This excellent book provides a robust framework and methodology for integrating strategy and risk management. Grounded in deep research and rich practical experience, readers will gain greatly from their insights."
Brian Brodie, Former CEO, Homeloan Management Limited, United Kingdom
Strategy and Risk Management are commonly disconnected in organizations frequently due to usage of jargon. This book avoids the jargon and makes the case on how an organization needs to view strategy and risk in order to navigate through turbulent times. The authors provide useful examples and new ways of looking at balancing risks with reward. This is a must read for executives who are looking to obtain greater value from their risk management and strategic planning activities.
Gregg Anderson, Director, Crowe Horwath LLP, United States of America
