ABSTRACT
This chapter concerns itself wholly with a case study in industrial risk measurement examining a transformation programme for a globally critical manufacturing unit for Unilever, one of the world’s most complex distributed companies. The context for the transformation is one of unrelenting business performance. Beginning with a critique of the industry standard risk register approach, shortcomings from its application to this type of complex problem are noted. These include the independence of the risk events, the meaningfulness of scoring and the isolated positioning of controls. A process for the design of a superior risk system is described. This includes reasoning at the meta-risk level, integrating connections between risks over time and linking of risk control and programme critical path. Critical factors for the success of this approach are noted, for example: modelling risk, not measuring, is key to performance; business material outcomes instead of probability-type statements are the correct referent; and intentional integration of the risk process and strategic decision making. The abilities of this system were validated by senior teams, and it was subsequently deeply integrated into planning and decision making. We argue that these and other success factors, evidenced in a high degree of technology transfer, validate the design.
