If you type the words “risk management” into your search bar your results will commonly focus on frameworks, models, processes, systems, strategies, and ways to prevent losses at your business or organization. This is quite normal as risk management itself was birthed as a business discipline and has traveled on that path for well over half a century.
But when we look at its core, risk management is something humans have been doing since the beginning of time. It is about decision making, it is about how the mind views the reality we exist in, and the uncertainty that circles our every move. From this perspective, risk is human-focused and less about fancy reporting dashboards and financial models trying to predict the next boom or bust.
Policies, frameworks, and models are all great as they are needed for structure and organizing collaborative movement towards common goals but are at their core, lifeless. They can never match the beauty and power of the human mind, even through their own creation. It is humans who move the world forward, not pieces of paper or squiggly lines moving across a graph.
This is why the human mind and risk have always fascinated me and will continue to do so until my time is done. Humans are complex creatures and are always evolving at a rapid pace. With more information at our fingertips than at any time in history, humans have all the power to implement decisions and take intelligent risks to make this world a better place. To disrupt, to push, to innovate, and never to yield. There is nothing more beautiful than the will and spirit of a human being.
As technological advancements have skyrocketed and a networked economy has been created, businesses and organizations are faced with the reality that if they are not moving forward, they are only slowly heading towards their demise. Innovate or die. The days of risk-averse business leaders holding onto past profit-making strategies are long gone, ask Blockbuster how that worked out for them. We have all heard one of the most dangerous lines in business that is still echoed in some office halls today, “This is the way we have always done it.” These words are nightmare fuel and if you hear them in a management meeting, run for the hills!
Businesses and organizations have no choice but to embrace innovation, to embrace disruption in order to create competitive advantages and sustainable growth over the long term. This also goes beyond the concept of innovation, diving into the generation of creative and innovative ideas that help move organizations into an uncertain future of fortune and risk. Where ideas and critical thinking occurs is equally as important as the concepts themselves. We are now living in a world where diversity and inclusion are in the spotlight, a well-overdue initiative in my opinion.
For the business environment to move forward from an innovative standpoint, businesses must be willing to disrupt the status quo, the cultures that have existed in the past as an asset but moving forward could turn into a liability if not managed properly. With a rapidly changing external environment and society, disruption is needed in order to proactively meet the needs and wants of consumers, no matter the product or service. Risk leaders should be at the forefront in this battle to disrupt deeply-embedded cultures that can hinder future success, these fragile systems must be shaken, the time is now. But how can this be achieved?
The emphasis on creating a disruptive culture, an uncommon culture, must ensure that all within the organization are being heard and a culture of diverse opinions and ideas is allowed to flourish organically, only building strength over time. By embracing disruption, a culture can become stronger, more resilient, some even obtaining an antifragility state. A culture that is not put under stress, that is not challenged, can never achieve sustainable growth. So instead of searching for calmer seas, we should seek out the storms that beat against the hull of our organizations, to challenge how we currently behave and seek new ways to develop the internal environment that drives the capitalistic organism towards the objectives and goals it so dearly seeks. Until next time…