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We need more glass half-full risk managers

Way too many risk managers, risk experts, and risk professionals are “glass half-empty” people.

Of course the role of risk management is to focus on  the potential things that can go wrong, but that does not mean that the risk manager has to be negatively focused.  In actual fact, it is that negative focus that has made risk managers the type of person that businesses wish to avoid rather than engage.

History has shown that risk managers have been perceived as the road block or the quickest way to get to a “No”.  This skill in being seen as such a negative in the business context is really only equalled, and perhaps surpassed, by the perception of an auditor!

Unfortunately, this perception is now causing the risk manager to have to continually fight battles on multiple fronts.  The battle for being heard, the battle for being understood and then the battle for being relevant and important.  Yet, in actual fact a high quality risk manager, finds that the information they have, and provide, improves business outcomes which in turn generates increased returns and/or reduces costs.

Therefore, it is with this reasoning that we say we should have more risk managers being positive, innovative, and proactive in their assessments and information for management.  With more glass half-full people, we would see that risk managers are seen as being strategic enablers to the business.

So, how do risk managers focus on being glass half-full?

Firstly, the risk manager needs to stop seeing the negative in everyone they interact with. and everything they perform.  Instead, we need to be more focused on finding the positive in those around us, and then working on bringing out these positives to provide better risk management information and decisions.  We need to be more engaging with others, and really show how we can work together and help each other to succeed.  Essentially, the risk manager needs to stop being so self-focused and centered and more external focused and team centered.

Secondly, risk managers need to trust people.  Although, that trust needs to be balanced with healthy scepticism, without a positive view of people, the risk manager will continue to be seen as a road block and the fastest road to “No”.  With a better balanced approach to working with other people, the risk manager can become an avenue to success through getting to the right assessment of the risks and controls, which leads to a “Yes”.

Thirdly, in order to progress further to being glass half-full, we need to change the approach to assessing risks.  Quite simply, the approach needs to be more proactive and to focus more on the future than the past.  Through using these lenses the risk manager will become more relevant at the management table, and may even find itself the first person to be brought into a concept or a new business idea.

So, post-GFC, risk managers are in a unique position to present themselves as the future.  This is the time for risk management to shine.  This is the time we show how we have grown since the GFC, and have become the catalyst for making the business future a success.

So, let’s get together and get more glasses half-full.  Let’s expand our horizons of knowledge and open of eyes to a future that will see change happen at an ever expanding rate.  For the risk manager that can truly embrace these characteristics and leverage the collective knowledge the best, will become a positive influence on senior management and will find that the battle for being heard has been won.

Cheers, and here is to the future of glass half-full.

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About

Scott North has extensive experience in enterprise risk management, internal audit, operational risk and compliance, risk strategy, scenario planning, technology risk, technology business analysis, systems design, financial accounting, and management accounting. Scott is a Fellow of the Australian Institute of Chartered Accountants with a Masters Degree from the University of Melbourne in Business and Information Technology. Scott is also a Fellow of the University of Melbourne.

Comments

  1. Great take on a familiar problem. Having moved from risk management role to front line position applying risk management, I am constantly surprised by people's negative view of RM. Maybe more glass half full risk managers will help change the perception. Next step may be for RM to recognise that events are a learning experience rather than proof of system failure.
    Cheers, Dean Holwill

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  2. Your third point is the key to making risk management more a part of the corporate culture. I do niche consulting – risk management for youth sports associations. Most of these organizations are non-profit, volunteer run, and deal with risk only in a reactive manner. Yet they fear the exposures that are inherent in organizations that deliver services to children. My primary teaching point when I present on the topic is that being focused on proactive risk management actually furthers their mission.

    On our website we track media reports of incidents likely to lead to legal exposure in the youth sports environment. My goal is to present them not as specters of bad things that can happen to you, but as opportunities to ask how their organization does or could address the issue.

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    • Fantastic comment Scott. Really agree with your comments and you are truly describing risk management in action. Providing a forward lens and using external data are two key elements of best practice risk management. If you have the time, we would welcome you preparing a guest post for our site to case study the work you are doing. If this interests you, please contact us.

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