Risk Management Framework for DDO - Pt 1
by Leica Ison
In this series, we explore a reported independent review of a financial services organisation’s risk management framework that highlighted many examples inadequate risk systems and leadership. The summary in James Frost’s article in AFR on May 23, 2020 showed:
“ the highest paid staff failed to devote the required disciplines into their roles and divisions they oversaw…
Committee members often lacked the time to review the full packs prior to meetings, instead focussing only on reviewing and preparing for meetings based on material directly relevant to them... Executives complained about the length of the reports – saying they didn’t read the reports because much of the information was duplicated anyway…
In particularly EY found the material in packs was backwards looking and rarely dealt with emerging risks.”
As observed, product management now has a significant role to play in not just the business's revenue growth but also in product lifecycle oversight. The case study in this AFR article is relevant to all companies seeking to weave risk management effectively into digital product management framework.
According to Gartner insights, the majority of CEOs (63%) expect to change business models in the next two years. Boards, c-suite and product managers are required rethink product oversight to ensure their products are designed, distributed and consumed appropriately. A sound product risk management system improves a business's ability to :
- Routinely identify risks faced at product and customer level,
- Rigorously evaluate the risk impacts,
- Communicate the risks and
- Address the risks with mitigation action plans.
Businesses that don't have a pragmatic product lifecycle oversight in the digital era are likely to fail and worse still – significantly erode customer trust and brand reputation.
At Skyjed, we have created digital product management software that embeds and automates risk management for Chief Product Officers and product managers. At the core of our digital product management framework is the automation of risk and regulatory reviews at each stage. The stages covered in product management include:
- Product planning
- Product development
- Product introduction
- Product lifecycle – new and existing
- Product leadership and oversight
The essence of the Skyjed framework addresses the systems and leadership challenges outlined in the financial services case study with the following principles:
- Embedding risk management as a routine in the product management process. Proper risk management is not a compliance activity – but a central part of the digital product managers role
- Gets out of functional silos by enabling a product manager to create a virtual team with Skyjed in seconds to connect and discuss forward-looking growth and risk scenarios
- Accounts for risk at the beginning of the product planning process – the design phase requirements
- Includes monitoring of product risks at a minimum every 30 days with your virtual team
- Sets and manage risk mitigation action plans every 30 days with weekly reviews
- Uses Ai based product health-check as a visual and straightforward way to communicate and track product risk scenarios over-time.
In this table I list some of the examples from the article and how Skyjed digital product management software addresses the gaps:
|
Recent example |
How Skyjed addresses this |
|
“ the highest paid staff failed to devote the required disciplines into their roles and divisions they oversaw”
|
Skyjed is based on continuous product auditing framework conducted as virtual team. The defined roles and permissions are set up in the workspace with disciplined product and risk reviews. |
|
Committee members often lacked the time to review the full packs prior to meetings, instead focussing only on reviewing and preparing for meetings based on material directly relevant to them
|
Skyjed’s unique Ai based product health check provides an instant visualisation of your product; s current status – rated out of 100. Ideal to do side by side comparisons and whole portfolio reviews. |
|
In particularly EY found the material in packs was backwards looking and rarely dealt with emerging risks. |
Skyjed’s automated risk assessments and product health-check assessments are forward looking – covering emerging risks – financial and non-financial. |
|
Executives complained about the length of the reports – saying they didn’t read the reports because much of the information was duplicated anyway
|
Skyjed’s product reports are Board ready – one product report – end-to-end from the virtual team. |
A recent survey has shown that product managers spend less than a few hours per month on strategy and even less on risk management if at all. When risk was considered, it was too narrow in the assessment and occurred functionally. A well-planned product management framework is critical to this success and management of non-financial risk. Successful leadership in digital ages requires that Boards have transparency and early warning system across their product lifecycles, for the leadership team end to end oversight of each product and for product leaders to have the tools to problem solve, continuously review and improve product lifecycles.
Read part 2 and 3 here:
Risk Management Framework for DDO - Pt 2
Risk Management Framework for DDO - Pt 3
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Read more about the target market determination.
Download our full guide on DDO compliance.
The Skyjed product lifecycle management and governance platform provides organisations with a 360-degree view of their product portfolios health and risk status while facilitating collaboration, transparency and product trust in the day to day operations of the organisation.