Page 143 - Performance Leadership

132 • Part II Operational and Analytical Dimensions

F igur e 8.6
Balanced Performance/Risk Map per Option

Increased Cost Cutting Riskier Reinvestment Increased
risk risk
High
High

Low
Low

Increased Increased
Performance Performance
Increased Market Awareness Islamic Banking Increased
risk risk
Low
High

Low High

increased margin. At the same time, the angle of the line repre-
sents the increase or decrease of the risk associated with the
level of ambition. The line can be horizontal, which means the
performance improvement activity can be scaled up without
additional risk. The line can go up, as it will do in many cases,
to show how the risk will increase proportionately or dispropor-
tionately when the performance improvement initiative is
implemented more aggressively. And there are cases where the
risk actually goes down, at the same time as the initiative has
more impact. This last case is preferable because the initiative
reconciles the natural dilemma between risk and performance.

3. Choose a performance improvement portfolio. Changing the risk
profile of the reinvestments was dismissed by the management
for the right reasons. It would have a negative impact while the