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Why information and knowledge are becoming increasingly important in companies and how they influence business risk
Data growth has never been as fast as it is today, and technologies have never developed as quickly as they do today. In addition, new working models through New Work require a new approach and handling of knowledge and data by companies and employees.
When decision-makers in companies make decisions today, they often have the bottom line in mind at the end of the day. In recent years, however, economic, social and governance (ESG) issues have increasingly joined the bottom line as an extension of corporate social responsibility (CSR) that cannot be assessed with hard numbers. To assess the internal and external influences of these issues on their own company, decision-makers often use risk matrices. In these matrices, the risks that decision-makers see for their company are classified according to probability and impact.
This article focuses on reducing risks that arise from a lack of knowledge in the company. Indeed, the topic of knowledge management and information provision is playing an increasingly important role. Even now, simple tasks are increasingly being automated. The human’s job is to supervise the machines and enable them to do their tasks well. But to do this, he must have the necessary knowledge. If they do not, new risks arise for companies, which must be mapped accordingly in the risk matrices.
Unlike in the past, this knowledge no longer has to be retrievable from memory. The information is all there, especially in the companies. There are learning management systems, intranets, project rooms and much more where all knowledge is digitised. So the employee’s job is to find the appropriate information and make the best decisions for the company. The task of the company or the decision-maker is to “empower” the employee to make exactly those decisions.
One way to map the risk of not having the right information at hand in a risk matrix is to classify it as a medium probability, medium impact risk. For example, it could be placed in the middle of the risk grid, between the low probability and low impact risks and the high probability and high impact risks.
It is important that the ranking of the risk is based on a realistic assessment of the likelihood and impact. You should also ensure that the risk matrix has been developed for the specific needs of your organisation or project and that all people involved understand and adhere to the matrix.
To further reduce the risk of not having information appropriately at hand, you could take steps to ensure that all relevant information is carefully collected and properly documented, and that all people involved have access to it. You could also consider how to better use and share the knowledge and experience of the people involved to ensure that all relevant information is available.