By Riaan Bekker, Force Solutions Manager at thryve
Determining risk is complicated – risk managers know this. But some might say explaining risk to others is even harder. You can’t simply demonstrate the technical path you followed to reach your conclusions. This might not only alienate your target audience, but it’s also insufficient.
Humans don’t calculate risk only through deduction. We weigh numerous factors that inform our decisions, the data only being a part of that. While technical methods such as the right frameworks are very important, the difference between success and failure in risk is effective communication.
This, ironically, has kept risk visualisation back. Ironic because visual information is a very good way to deliver a point. But when the practice started to take root, it couldn’t encompass all the dimensions of risk. Practitioners instead focused on visuals to sell risk strategies and outcomes to the organisation.
The habit has stuck, but it’s no longer compatible with how we manage risk today.
Risk determination relies on data, something in abundance today. But a lot of information doesn’t naturally translate into informed choices. Today leaders want to use risk for making strategic decisions. They need to understand how risk fits into their context, which can vary considerably.
For example, some stakeholders might drill down into policies to analyse premium spend in relation to policy coverage. Yet claims managers might want to separate claims by severity and monitor how long they stay open. Risk can provide nuanced information across an organisation. But then we return to the original problem: risk is tough to quantify, let alone explain to non-risk professionals.
Visualisation can change this if it evolves beyond ‘selling’. Modern risk visualisation should be able to answer dynamic and contextual questions, so a risk communication strategy must consider several things. Who are the visualisations for? What questions might those people ask? Will they want to recontextualise the visual data to chase certain ideas?
The value lies in drilling down and finding answers. Traditional risk visualisation on its own can’t accomplish this. But even standard dashboards can’t either.
Your ability to communicate contextualised and dynamic risk visualisation depends on complete data sets. By this I mean you have to operate from a single truth, an integrated view of the company’s risk information. This not only extends to your presentations but any dashboard or visualisation tool that someone else in your company might use.
Businesses benefit from technology that captures, collates and visualises risk data in different contexts. Risk integration platforms are that technology. At thryve we implement and support Riskonnect, one of the market leaders in this field.
It acts as a central space for risk information. The platform integrates or interacts with different sources from databases to spreadsheets, aggregates the information into a single source using the organisation’s preferred risk frameworks, then employs the latest in web services to create interactive portals and dashboards covering a variety of risk visualisation methods.
You could present to the board, drilling into different visuals and dynamically changing context. Others in the organisation can also access the information and visualisations they need to help understand risk’s relationship to their choices. As long as everyone can rely on the same complete version of information, then risk visualisations are incredibly effective at making risk more strategic.
Do your risk visualisations answer your audience’s questions? Do they represent the single truth of the organisation’s data? Can stakeholders recontextualise visual information to help inform their thinking?
If the answers are yes, then you are using modern risk visualisation the right way: backed by a risk communication strategy and supported by an integrated platform. If it’s not, you should explore the amazing things that can be done with risk visualisation today.