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Stress-testing the strategic plan


The Executive of a government transport agency had been implementing a refined strategic management process progressively for some years. As part of the programme planning step, the Executive wished to undertake a risk assessment of its proposed strategy.

The purpose of the risk assessment was to identify and set priorities for the major risks in the corporate strategic plan, in other words to stress-test the plan and identify anything that might hinder or enhance the achievement of the plan's objectives significantly.

The outcomes required from the risk assessment were:

  • A list of the main risks to the strategic plan
  • An assessment and evaluation of the importance or priority of each risk for management attention
  • A list of management responsibilities for developing action plans to treat the high-priority risks for inclusion, where appropriate, in the strategic plan.

These outcomes would allow the agency to identify the practical actions required to minimise its exposures and maximise the achievement of its critical success factors.

The process followed steps in the International Standard ISO 31000 Risk management -- Principles and guidelines.

Establishing the context

The strategic environment and the main stakeholders had been identified during the initial steps of the strategic planning process. The critical success factors had also been identified, and were reflected in the six programs in the strategic plan. These involved five operational goals and one internal goal. The goals were:

  1. A transport network that meets the accessibility requirements of the community
  2. A transport system that is efficient and reliable
  3. A safe transport system
  4. A transport system in harmony with the environment
  5. An organisation that meets its community service obligations as set by the government
  6. A set of internal organisational imperatives related to other government policy initiatives not all related directly to transport priorities.

The agency had formed 14 specific sub-programs from these six programs, each directed towards a particular corporate objective. The sub-programs were used as the critical success factors for this risk assessment. They were also used as the key elements for structuring the workshop, with the addition of an ‘Other strategic issues’ element (Table 1).

Table 1: Sub-programs (the same as the KPIs)




Social equity


Economic development


Efficient transport infrastructure


Efficient transport system


Safe vehicles and vessels


Safe drivers and mariners


Safe unprotected users


Safe infrastructure


Sustainable managed environment


Community service obligations


Organisational efficiency


Organisational effectiveness


Personal and organisational development


Improved health, safety and fairness


Other strategic issues

Establishing the context also involved reviewing the outcomes from various Executive workshops held as part of the SMP. From the reviews, detailed structures and a timetable for the risk assessment workshop were developed, including spreadsheet templates for recording risks.

Risk assessment

For each sub-program, risks were identified in a structured brainstorming workshop. The key participants in the workshop were the Chief Executive, the Directors and the Corporate Development Manager. Risks were defined as events that could arise and reduce or enhance the ability of the agency to achieve its objectives. 211 risks were identified during the workshop.

For each risk, the participants made a judgement about the potential consequences and the likelihood of that level of consequences arising, on scales that were aligned with the agency's risk management process. These consequence and likelihood ratings were used to determine initial risk priorities.

The risk identification and risk analysis was conducted during one workshop session. A second workshop on the following day was used to review all the risks identified, with their initial priority ratings, to develop an agreed set of risk priorities.

The review also identified the Director responsible for each major or moderate risk, and for those risks that had an obvious linkage to a major risk (although this analysis was not comprehensive).

As a confirmatory check, a brief comparison was made between the risks identified in the workshop and those identified in an earlier exercise. All significant items from the earlier work appeared to have been included.

Responsible Directors were tasked to develop action plans for each major and moderate risk. In many cases, risks had been recognised already and actions were in progress for dealing with them. Where appropriate, treatment actions were included in the strategic plan.

Subsequent review of risks

In a subsequent planning period, the Executive participated in another risk assessment activity. The focus was on:

  • Discussion of lessons learned from earlier risk management work, and the successes and failures in making it part of the organisational culture
  • Identification of new strategic risks associated with the new activities of the agency, 'external' issues and recent events, with a focus on matters of concern at the Executive level
  • Review of all risks (the new ones and the major ones from the earlier work), and allocation of consistent priorities based on current assessments
  • Development of an action plan for progressing risk management in the agency, including actions for initiating and sustaining culture change across the organisation.

The new assessment used a simpler set of elements summarised in Table 2.

Table 2: Key elements for the review




Lessons learned


Passenger transport


Roads and highways








Integrated transport initiatives


Corporate transformation initiatives


Other strategic risks

Lessons and conclusions

Stress-testing is an important step in developing the strategic plan. It is a way of ensuring, as far as possible, that the plan 'makes sense', and of identifying potential improvements and bottlenecks. Integrating risk management and strategic planning into a single combined process allows them to be undertaken together efficiently and effectively.

This is made easier if risk management processes are embedded in and become part of strategic planning, in a single integrated activity. Figure 1 outlines the way in which the two processes can be aligned:

  • Establishing the context or environmental scanning is a direct input to the draft plan
  • Risk assessment, discussed in this case study, is used to stress-test the draft plan, to increase the robustness of the final plan by including appropriate risk treatment activities in it
  • Monitoring and review of the business environment, the risks and the controls, is a core part of both risk management and strategic business management
  • Lessons learned from previous periods, for example through root cause analysis, also provide a direct input to the draft plan.

Figure 1: Integration of risk management and strategic planning

For additional related information, please check the following links:

Public sector transport agency
Roads and highways
Public sector and government business