I was reading through some research on risk assessments & appetites this Monday morning when something slapped me across the face, like someone opening a tin of sardines next to me on the International Space Station. I kept reading from authors that to be successful with these risk management assessments one must ensure their audience (e.g., Board, Senior leadership) is fully aware of what these terms mean and how they are applied in the overall grand scheme of the risk management process. But…what does that even mean? If risk management is simply a business discipline that improves the way uncertainty is viewed and decisions are made in a complex world, why is so much education needed to be passed down from the risk leader to their stakeholders?
So the risk leader gets a bunch of senior leaders and execs in a workshop that will run all day so they can explain all the nuances of what risk management is and wait!…we have all this cool jargon that we need to use so we can be “risk cool”, the kind of cool where you turn into a camel sporting a tux in a 1950’s drop-top with a sweet cancer stick hanging from your furry, dry lips. How about let’s save cool for the cool kids and apply value where it is needed, within the business.
What value is there in wasting the time of business leaders by sticking them in some workshop or seminar where risk management is the main topic? Does the risk leader honestly think these people got to their levels of success by not at least having a fundamental knowledge of how to identify, analyze, and respond to risks that challenge or seek to disrupt the pursuit of strategic objectives?
If you have seen any number of Shark Tank episodes you have come to know the sighs and growls that are heard from the Sharks when they hear the costs to educate consumers on a new product or service. The cost and time needed to educate a consumer are critical in the forecasted success of the new venture. If it takes too much time for a consumer to stop in a store and learn what your product is all about then you may have already lost the battle, never to see this consumer again. The same could be said about risk management.
If a risk leader is attempting to establish a risk management function within the overall support system of a business they need to stop educating and start listening. The education on risk management, a dry and negative-leaning subject, can turn high-level stakeholders away, never to be seen again. What do they have to be excited about? Are they going to be able to throw out “risk appetite” or “key risk indicators” at social events and turn into the Paris Hilton of the night? Not likely, that is because this lingo does little to provide value outside of those who practice and regurgitate this stuff on a consistent basis.
No, I think it is the risk leaders who should have to change roles from teachers to students. Risk management is about being a part of the company or organization, to inject its methods into current decision-making processes that exist today. No re-creating of the wheel or inventing some new form of business-speak. If risk leaders speak the language of their current land, they can forgo the educational seminars and start helping the business in whatever way deals with risks in the methods they know-how.
The value of a risk leader is in how they can conform to a capitalistic organism and become a critical function in helping the organism seek whatever it needs to survive and thrive, sustainably of course. Speaking risk jibberish is not the way into the light. Just some Monday morning thoughts…