Rolling sixes in a game of risk

We are familiar with the risk the sector faces now and in the future. We can be seen as part of the problem, not part of the solution, with a product that is obsolete and doesn't meet our customers' aspirations. There are issues of capacity, future financing and a mismatch of current skills with future requirements. Many organisations are dealing with the consequences of past developments of the wrong type, size and place and the impact of poor investment decisions. We all face the risk of restricted revenue, with the possibility of deflation when Britain joins the euro, and future changes to housing benefit, as well as the impact of Supporting People. There are complicated choices to take on procurement, the choice and management of contractors and the drive for innovation, as well as achieving value for money. Sometimes, we plan the future without using the right data – the needs of differing local markets, the investment decisions of other public and private sector players and the varying economic trends of our sub-regions. Our image and reputation can be threatened by poorly managed modernisation schemes, lack of cost control and over-optimism in promising too much and delivering too little.

The last point is a real risk for the sector. How do we play a part in the government's modernising agenda of the delivery of effective public sector services? What we need is a new type of delivery vehicle with powers that provide neighbourhood and regeneration solutions. To do this will require innovation, challenge, obligations and, of course, more risks.

It is obviously important that we continue to improve our core services. But in this atmosphere of high political expectations for new roles and expanded capacity to produce new homes, it is more important to ensure risk management is woven deeply into our attempts to respond to all of the pressures which face us now and in the future.

There is a danger that too much concern about risk would lead to an organisation not taking any risk at all and therefore making no progress. It is more likely that widely drawn risk control frameworks will generate and drive innovation.

An effective risk management framework can help innovation and the delivery of ideas: concern about the risk that an organisation may not keep in tune with its customer requirements will be likely to drive an emphasis on continuing improvements in service delivery, market research among customers and customer involvement; an awareness of the risk that accommodation may become unpopular will drive innovative design, good space standards, better contractual and construction management and effective asset management policies; a constant eye on financial risk will produce good scenario planning, long-term cash flow and security planning.

There is a danger that too much concern about risk will stop an organisation taking any risks at all; but effective risk management encourages innovation

The more an organisation is aware of the risks that face it, the more likely it will be to have processes in place to manage that risk, reduce it where appropriate and ensure management action is effective in avoiding unnecessary risk.

An organisation's strategic plan should have taken appropriate notice of risk and quantified it. A statement of which risks the organisation does or does not wish to take should be explicit and, when the organisation decides to take a risk, contingency action will have been identified.

Effective risk management requires constant vigilance and effort to review and update.

The organisations which are at the greatest risk are those who do not have an accurate, up-to-date assessment of the risks they face.