For the past few years, it’s been a little lonely for the Enterprise Risk Management (ERM) proponents of the world, but suddenly we seem to have lots of company at the party. Regulators are pushing companies to implement better ERM strategies. Standard & Poor’s is advocating ERM as a lead indicator of risk and credit worthiness. Your colleagues are talking about it. ERM vendors and consultants are shouting from the mountain tops.

This mounting pressure to do something about ERM is one of the reasons “Chief Risk Officer” is the fast growing job title in corporate America according to Aberdeen Group research. It’s also why most companies have started, however haltingly, to incorporate risk management into their business decisions and operations.

The party is definitely underway, but there is a great big elephant in the middle of the room that no one seems to want to talk about. For all the acceptance about the need for ERM, the reality is that people are still confused and uncertain about what to do next. Embracing ERM with a tone from the top is just the first step; implementing it effectively is proving to be a little bit more difficult.

The answer lies in a new iteration of the proven Capability Maturity Model (CMM) created in the mid-1980s to provide a framework to guide and measure software development. The CMM has influenced the creation of similar models that successfully tackle other complex initiatives. The latest to emerge is the Risk Maturity Model (RMM), for Enterprise Risk Management which effectively breaks the issue of risk into its core elements to speed and simplify the implementation of ERM.

The role of the process.

According to the Software Engineering Institute (SEI) at Carnegie-Mellon University, the organization that pioneered the Maturity Model concept, “Everyone realizes the importance of having a motivated, quality work force and the latest technology, but even the finest people can’t perform at their best when the process is not understood or operating at its best.” Enterprise Risk Management is a process, and RMM is the framework to create clear and objective success criteria, facilitate thorough planning and communication and guide effective monitoring and control.

Bring the true risk picture into focus.

While the risk officer ranks are filling up rapidly, most are learning on the job. They are smart and willing, but they come to risk management with strong backgrounds in a variety of corporate functions, such as legal, finance, compliance and IT. As a result, the views of enterprise risk managers and their colleagues tend to be skewed to their backgrounds. Rigorous controls take precedence for the Internal Auditor, for instance, while the compliance pro says it’s all about conforming to the regulations and the marketing maven will declare it is all about the brand and company reputation.