This area of risk should be considered where the institution is considering moving into a new area of activity, for example, a new course offering.
- Consideration should be given to the costs of setting up the infrastructure to support the new course. These costs could include physical location, such as, the need for new buildings or the refurbishment of existing space. In the latter case consider if the current residents of the space need to be re-located and the costs associated with this. There may also be staffing issues (although this will fall under the responsibility of the Human Resources Department, it should be considered).
- Strategic risk can arise in the time period needed to plan, prepare and set up a new facility. There may be a possibility, in the chosen area of curriculum, of either the emphasis or demand for work in the planned area changing or another institution getting into the field before your institution is ready.
- A change in strategic direction can also come about on a departmental level when, for example, there are staff changes at a senior level. There will be instances where, when a Director of Estates or Finance moves to another institution, he/she may bring with them different solutions to services such as bringing a service in-house or outsourcing a service.
Strategic risk is probably one of the most difficult areas of risk to determine and to assess the potential impact of issues arising. However, especially in higher value ventures, it should be considered and possible solutions outlined.