Risk Management in Higher Education: Navigating the New Normal

Risk Management in Higher Education: Navigating the New Normal

                                                             By Wannarasmi  Chanthakut


            Risk is an uncertain future event that may or may not occur, with a certain probability or likelihood. If it does occur, it will have a negative impact that causes loss, damage, and failure to achieve objectives and goals.

Risk = Chance of occurrence (Probability/Likelihood) X Impact (Impact/Consequence)

          (Knowledge Network Institute of Thailand, 2020)


   In the past, higher education institutions primarily focused on traditional risk factors such as policy/strategic, operational, financial, and compliance risks. However, with the advent of digital disruption, universities now face a new set of challenges. These include uncertainties, hazards, and potential opportunities that arise from the volatile, uncertain, complex, and ambiguous (VUCA) environment. The higher education landscape has evolved significantly, necessitating a shift in risk management strategies. While traditional approaches focused on policy, operational, financial, and compliance risks, the emergence of disruptive forces has introduced new challenges. (Puncreobutr, 2024).

📍Navigating the New Risks

    Universities now face uncertainty risks, arising from unpredictable situations and inaccurate forecasting. These risks can hinder goal achievement and impact institutional sustainability. Additionally, hazard risks, such as natural disasters or cybersecurity threats, pose significant challenges. However, amidst these challenges lie opportunities for growth and innovation.

        To effectively manage these evolving risks, universities must adopt a proactive approach. By fostering clarity and utilizing the CLEAR approach (Communication, Limit of Detection, Effective Operational Strategies, Awareness, and Readiness), institutions can mitigate uncertainties and navigate the VUCA landscape. Moreover, embracing the SELF approach (Skill Gap Management, Empathy Learning, Lifelong Learning, and Learning from Failures), and ACT approach (Adherence to Rules, Confidence and Collaboration, Target and Time Management) allows universities to capitalize on emerging opportunities and stay ahead of the curve. (Puncreobutr, 2024).



💢Top Risks in Higher Education

         Deloitte (2024) said that recent trends have highlighted several key risk categories:

  • Business Model Risks: These risks challenge institutions' revenue generation and sustainability. Factors such as changing student preferences, technological advancements, and economic fluctuations can impact revenue streams.
  • Reputation Risks: Negative publicity can significantly damage an institution's brand and reputation. Effective reputation management is crucial to maintain trust and attract students and stakeholders.
  • Operating Model Risks: Inefficient processes, inadequate staffing, or outdated systems can hinder operational efficiency and effectiveness. Adapting to evolving trends and technologies is essential for maintaining a competitive edge.
  • Enrollment Supply Risks: Declining student populations and demographic shifts can pose challenges to enrollment and revenue stability. Universities must proactively address these risks through strategic enrollment management and outreach efforts.
  • Compliance Risks: Adherence to complex regulations is crucial to avoid legal and financial penalties. Effective compliance management systems are essential to mitigate risks and maintain institutional integrity.


📒🔍🔑An Enterprise Approach to Risk Management

          Adopting an enterprise-wide approach to risk management enables universities to proactively identify, assess, and mitigate risks across all areas of the institution. By integrating risk management into strategic planning and decision-making processes, universities can enhance their resilience and sustainability. (Puncreobutr, 2024).


          🔚Conclusion

          As the higher education landscape continues to evolve, universities must adapt their risk management strategies to address the new challenges and opportunities presented by the era of disruption. By embracing a proactive approach, focusing on emerging risks, and implementing effective risk management practices, institutions can navigate the complexities of the new normal and position them for long-term success.

 





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