For an organization with the breadth and scope of RTI International, whose projects range from establishing local governments in postwar Iraq to studying drug abuse in the military and assessing the literacy of American school children, getting a grasp on strategic and operational risk is a challenge. RTI's latest iteration taps the value of highly sophisticated dashboard technology.

RTI, based in Research Triangle Park, N.C., is one of the world's leading research institutes. While it had implemented an enterprise risk management (ERM) program in 2007, RTI had not yet developed a systematic methodology for collecting, discerning, acting and reporting on key risks. "We decided to build a dashboard that would capture the entire risk profile, and drill down into root causes and mitigations taken to report to our board, audit committee and senior leadership group," explains Ward Sax, RTI's chief risk officer, treasurer and executive vice president, who ran herd on the ERM strategy. Previously, RTI had created a risk supervisor network that included 23 supervisors who were points of contact for identified risks. These individuals shared data on key risks in their areas, but did not yet have the tools to aggregate and convey this information to senior management. A dashboard utilizing the traditional red, yellow and green stoplight imagery solved the dilemma. The technology offers a way to quickly and efficiently peruse a set of 36 key risk indicators (KRI) to see if the criteria required immediate actions to reduce the perceived threat. A red risk, for example, is one that is unacceptable or anticipated to increase in the near future. "It is up to the owner of that risk to develop and implement a risk mitigation plan to bring the risk back in line with our acceptable risk tolerance," Sax says. Each KRI is assessed via a set of objective metrics or a subjective assessment made by the risk owner or manager. "For example, staff retention is a KRI managed by our HR department. The dashboard is programmed to know how many voluntary departures are occurring to determine if the number is within customary bounds. We're a people-driven culture so if we suddenly lose three scientists in a particular area, it's a serious problem. If the number of voluntary departures in an area exceeds the threshold, it might pop up as a yellow light or red." The dashboard helps the ERM department to quickly report the information "to allow for more fully informed operational and strategic decision making, in addition to expeditiously addressing compliance concerns," he says. To develop the dashboard, RTI partnered with Marsh Risk Consulting, which provided a basic model assessing four to five key risk areas. The ERM department enhanced the tool to capture an expanded view of the organization's risk profile. The dashboard is comprehensive in its scope, flagging certain high-risk areas like foreign ethics and financial internal controls for especially vigilant oversight. Up and down arrows indicate changes in a risk ranking. The dashboard is complemented by a series of 15 separate risk area reports. While it is difficult to quantify a return on investment for the dashboard, Sax says the project's success is evident in a significant increase in the breadth and depth of risk discussions, as well as the increased risk awareness at the board level and leadership across the organization. "The process of risk identification is now dynamic and continuous," he adds.