Risk Management FAQ

What is the role of subject matter expertise?

United States

When developing good risk-conscious strategies, we must be able to identify threats in order to determine if there is a favorable cost/benefit in mitigating those threats. The ability to identify threats requires a certain level of expertise. The more significant the goal (in terms of potential downside or strategic importance) the more critical it is to have the best possible expertise involved in developing and analyzing the strategy and its associated threats.

An example - if an organization is choosing to expand its sales activities into a new country/culture it would be wise to have someone familiar with that culture (a subject matter expert) when developing that sales strategy. Without that expertise, the sales strategy would likely have many threats that are not even identified, much less mitigated. This equates to a very high risk strategy.