The Art of Strategic ERM™

The Risk Business

Posted by John Drew on

When someone would ask what I do for a living, I’ve always said that I’m in Risk Management.

And it’s unfortunate…

It’s an unfortunate classification…

And it’s unfortunate that so many business leaders see Risk as something to be “managed”.

Risk can’t be managed, any more than gravity.

Risk is just too big.

We have to understand that it will always be present in our environment. And as such, we must also go beyond just co-existing with it.

Here are 3 ways to do that:

#1: Risk is something to be optimized.

Managers measure, maintain and react. Leaders optimize. And to fully optimize Risk, we need to gain the clearest visibility to Risk.

And visibility allows proactivity.

#2: Risk is a key strategy.

Your Risk Appetite and Heat Map is unique to your organization and goals. Therefore, your Risk Strategy, driven by the clearest visibility possible, should be as well. And this strategy should be owned by every key leader in your organization.

Only then, can Risk be a shared strategy enterprise-wide.

#3: Risk becomes a culture.

And in addition to strategy, an enterprise-wide culture is driven by shared values, goals and language.

Managers become leaders…

Leaders become strategists…

and Risk Leadership (not management) becomes freedom.

 

 

Business Culture CECL Compliance Credit Risk ECRM ERM Expected Loss Freedom June 2018 Leadership Risk Risk Management

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