How can you use ERM to manage risks with crowdsourcing in innovation?

1 What is ERM?

ERM is a holistic approach to identifying, analyzing, and responding to the risks that affect an organization's objectives, performance, and value creation. ERM helps you align your risk appetite with your strategic goals, and integrate risk management into your decision-making processes. ERM also helps you monitor and communicate your risk profile and performance to your stakeholders.

3 How to use ERM for crowdsourcing?

To use ERM for crowdsourcing, you need to follow a systematic process that involves four steps. First, it's important to define your objectives and how they align with your organizational goals and risk appetite. Second, you should identify and assess the potential risks that may affect your crowdsourcing objectives. Third, you need to manage your risks by implementing strategies and actions to prevent, reduce, transfer, or accept them. Lastly, you should monitor and review your risk performance and progress to measure the effectiveness of your risk management actions and learn from your experience.

5 What are the challenges of using ERM for crowdsourcing?

Using ERM for crowdsourcing poses some challenges, such as defining and communicating your risk appetite and criteria for crowdsourcing, collecting and analyzing data on risks, balancing risk-taking and risk-avoidance behaviors, adapting and updating risk management practices, and integrating and aligning risk management functions. These challenges are especially difficult when dealing with diverse participants, facing uncertainty and complexity, facing trade-offs between innovation and control, facing changes in the environment, or involving multiple departments in your organization.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?