Gain Insights Into Strategic Risks with Macro Risk Analysis

Macro risk analysis uses simple modeling to gain insights into strategic risk dimensions. The importance of understanding strategic risk dimensions is emphasized by ISO recommendations that organizations "understand the context" and COSO's ERM exposure draft principles suggesting organizations consider risk in the business context and evaluate risk in alternative strategies. The COSO exposure draft also highlights the following strategic risk dimensions:

  • The possibility of strategy and business objectives not aligning with mission, vision, and values
  • The implications from the strategy chosen
  • isks to executing the strategy.

Organizations should consider how they identify and understand these strategic risk dimensions. One tool to help understand strategic risk dimensions is macro risk analysis. This tool helps a company model how key macro variables drive strategic risks. 

Some potential benefits from macro risk analysis include:

  • Creating a dialogue around strategic risk drivers
  • Learning how much strategic choices are impacted by macro factors
  • Confirming the business model
  • Gaining clarity on performance metrics.


Read more about macro risk analysis in the recent white paper by Jim Presmanes and Paul Walker.