DEVELOPMENT
have nicknames across the profession like the
‘Fun Police’ and ‘Business Prevention Officers’.
Disrupt the function
that is supposed to
help with disruption
Once risk management was something used
to deal with complexity. Now risk management
has itself become complicated. It’s time for us
to make clear choices, says Bryan Whitefield.
THE EXPERT
Bryan Whitefield
mentors executives in
organisations to increase
their influence and
improve decisions across
their organisation. He is
the author of Winning
Conversations: How to
turn red tape into blue
ribbon and delivers
his Persuasive Adviser
Program across all
sectors of the economy.
We can’t predict the future with accuracy.
However, with the advancements of technology,
the impact of climate change and the geopolitical
forces that may come into play, we are going to
experience unprecedented growth in complexity
over the next decade.
Those organisations that learn to lead through
that complexity will thrive while others will be
overwhelmed. Complexity creates uncertainty
and risk management is the process humans
have been using through evolution to manage
uncertainty, some better than others.
Risk management is the simple process of
considering options, considering the consequences
of those options and estimating the likelihood
of different scenarios taking place and then
choosing a path to follow. Simple.
So why is risk management failing in
organisations?
There are many reasons that risk management
is not strong and prevalent across the business
landscape. The oldest and most entrenched
reason is because of the perceptions of risk
management as something negative. That risk
management is a handbrake on business, or a wet
blanket taking any of the fun out of it. We now
Why has this perception persisted?
In part it’s because of the professional disciplines
that picked up the risk management mantra. In
the industrial space it was the engineers who are
traditionally both technical and have a need for
accuracy. This can lead to confusing technical
terms and even more confusing equations. The
result: staff and entrepreneurial managers could
not relate. All they saw and heard was complexity
and gobbledygook.
In the finance (and many other) sectors, it has
been the audit firms who have led the way. The
urge for improved governance, including risk
management, came through audit committees.
The result has been, to a large extent, an audit
mindset about risk. That risk management is
about mitigating risk rather than harnessing
uncertainty to take calculated risks. The result:
staff and managers outside of audit and finance
thought risk was about compliance and that
audits need to hassle you to assure others that risk
was being managed.
We once had a simple process used through
evolution for challenges called ‘fight or flight’.
As we evolved, we used it for decisions like when
to cross the road safely, when to invest or divest,
hire or fire, insource or outsource. A process that
was designed to help us handle the uncertainty
created by complexity was made complex.
The result: boards all over the world had risk
registers reported to them containing 400 risks.
The reporters were looking for a pat on the back.
Board members looked at the list and asked, “So
what does it all mean?”
And what about the language of risk?
Not only did the profession make risk complex,
we created our own language. Risk Speak. We put
‘risk’ in front of or after perfectly normal words
like conduct, appetite and reputation. We then set
about creating a whole new world around it and
separated it out from the world of business.
What can you as an EA do about a situation
like this?
When the boss groans when the topic is brought
up, ask them why? Is it because it is too hard and
complex? Is it because they can’t understand the
risk people when they talk? Or is it because they
have allowed their old perceptions of what is
actually a good process to cloud their judgement?
If the latter, ask them to open their eyes. If
they find the risk process being fed to them is too
complex or too difficult to understand, suggest
they change that. It does not have to be that way! S
www.bryanwhitefield.com
Issue 3 2019 | Chief of Staff 59