Risk management is often characterized as a narrow, highly technical field that is largely divorced from the mainstream operations of most businesses. Looking at the various books, presentation and Web sites created within this profession, it is easy to see how one could fall into that mindset.
It's not difficult to find a how-to guide for almost any technical problem in many professions, yet rarely will one find within the risk management profession literature that addresses the arts of influencing, change management and political navigation.
Of course, mastering technical skills is absolutely necessary to be successful. These technical skills are crucial when designing your risk management program on the white board. However, sooner or later, your ERM program must be put into practice within the organization for which it was designed.
While it would be nice to believe that upon seeing a solid, common-sense proposal from risk management, everyone from senior management down to line workers would offer their complete support. The reality is that many offer indifference, resistance or even outright hostility. Overcoming this is as essential as mastering the technical aspect.
A risk manager certainly will not succeed without being able to traverse the complex personal and political challenges that arise when introducing any change into an organization's culture. As a risk management professional, you can only be successful through others. That is, you'll have achieved success when decision-makers in your organization actually use the risk management program and tools you have designed and apply them habitually.
To implement a new program such as enterprise risk management within a large organization, you need to add people skills to your technical skills. To be successful as a risk manager, you need to embrace the role of coach and cultivate in your people the skills and mindset they need to make risk management live and breathe in the organization. This means you need to develop (or acquire in your group) the skills to inspire, influence and motivate people; to teach new ways of doing things; and to facilitate change.
To inspire others, first and foremost, you need to exude passion and enthusiasm. Just saying the right words is not enough. To be credible to others, you need to believe in what you are selling, and that passion for ERM needs to be palpable. You need to communicate through your actions and body language that risk management is valuable and important.
More importantly, you need to let your people know you believe in them, in their potential to apply risk management in new ways and to ultimately achieve better outcomes than any of you would have dreamed possible. Your team members need to believe that you think they can do risk management well if they put their mind to it.
To develop your influencing skills, you need to become a highly effective communicator. One of the most important and obvious, but also the most overlooked, communication skills is listening. While it may sound simple, many programs fail to generate the buy-in they need because the message is not tailored to the managers who need to adopt the program. If you want to "sell" the managers in your organization on the benefits of ERM, you need to listen to what each "buyer" says his/her needs are and craft your ERM "sales" message to speak to those needs.
Good communication is never about manipulating people. Rather, it is about understanding their goals and desires and then clearly showing them how risk management can help them to attain those goals, faster and with less effort. A good teacher or coach will come up with different ways to explain a concept so that their "student" gets it.
Another fundamental skill that is often an afterthought in the risk management world is communication planning. You need to be constantly communicating your message, and you need to be sure that the organization's leaders and risk management champions are also reinforcing key messages. A common mistake is to think that the communication job is done when the ERM program is announced. Situations change, people get distracted or forget. Revisiting and revising your communication plan needs to become an ongoing process.
An essential risk management implementation skill is motivation. If you think the implementation task is complete when you've trained everyone, think again.
Research demonstrates that productivity improve from 22 percent for training alone to 88 percent when coaching is added. You need to motivate your people at every step of the learning process.
At first, you have to motivate your people to get over their fear of failing so that they will try out the risk management tools and skills you're offering. Then, you need to encourage them to stick with it long enough to actually become proficient at using those tools. Once they've got the hang of enterprise risk management, you need to help them make it a habit to routinely use the risk management discipline in their decision-making processes.
There is still one more essential skill for success: facilitation. Because a risk management program, especially ERM, by its very nature affects many parts of the organization, one will need a lot of partners. Therefore, the ability to facilitate collaboration is essential. For example, an ERM program cannot be seen as a one-way street. In addition to making a pitch to others, one has to be willing to accept input and adapt the program to fit the needs and expectations of others. This means that even resistance should be used as an input into the program.
Cass Stein, program manager of Ball Aerospace, notes that often those who resist the most also offer the most value.
"Understand that others in the organization may have viewpoints which, although contrary to the new initiative, may hold key improvements which enhance the effectiveness of the plan," he says."Many of the best suggested improvements for our risk efforts have come from folks initially opposed to the risk initiative."
That a risk manager will encounter resistance in driving change is a given. Most seasoned risk professionals will readily admit that the most challenging aspect of this profession is learning how to convince others to accept new ways of doing business. Improving one's technical acumen, while important, will not solve this problem.
To become a truly effective risk manager, one has to expand the skill set beyond the technical into the softer, subtler skills of coaching and change management. While this might seem at first blush to fall more under the job description of human resources, it is equally essential to the risk management professional.
DIANA DEL BEL BELLUZ is a risk management expert who helps executives in large organizations to implement systematic and sustainable risk management practices. She can be reached at email@example.com.
June 1, 2008
Copyright 2008© LRP Publications