Innovation has currency in risk management discourse. I presented “How Risk Managers Can Lead Innovation” at the Infonex Public Sector Risk Management Conference (February 2 – 3, 2010) in Ottawa. Sasha Shymanska, the conference organizer, originally suggested to me a topic to link risk management with innovation, but then was hesitant as the idea did not at first have internal support. But I knew she was on the right track, and encouraged her to keep it on the agenda.
The title of this year’s RIMS ERM Conference (Nov 1-3, 2011, San Diego) is “Where Risk Meets Innovation”.
Many risk managers will be puzzled by the possibility of a link between the two. It is curious that the economic crisis has raised the profile of both the traditionally conservative profession of risk management and its polar opposite, high-risk invention. Yet a risk manager’s identification of risk becomes, with the right attitude and support, a structured and thorough search for opportunity for innovation.
We can see that invention and novel practices, even for mere survival, have a renewed relevance in general business discourse, especially in view of the economic downturn. One good source, for example, is the BusinessWeek site on innovation. In the public sector, the CCAF-FCVI convened a symposium Risk, Innovation and Control back in the fall of 2008.
General ideas of encouraging innovation and responsible risk-taking are familiar. Risk managers will need to know exactly how to build such a culture. If they are to take a hands-on role, they will also need tools and methods to actually begin exploratory projects. I believe the risk professional is perfectly situated to take the role of facilitator, who leads the discussion of risk and opportunity amongst subject matter and program experts. Innovation needs champions, and the risk manager can help not only greenhouse new ideas, but assist in their evaluation within a graduated framework of intended benefits. Finally, the risk professional can assist with implementation according to proven principles.
[Revised. Originally published 16 Mar 2010]