[980 words, edited, originally published 2013-26-07]
As far back as 2012 RIMS (Risk & Insurance Management Society) reported on “The Evolving Role of the Risk Professional”. They recommended that risk managers view risk in a new way that “builds internal alliances, and enhances the strategic decision-making capability”; this in turn would require “specialized communication and technical skills”. Risk professionals are often still perceived as working in silos, using limited skill sets. Here are six aspects of the risk manager’s expanding role:
1. Risk Manager as Planner
In this role, the risk manager considers: what is the state of the organization’s planning practice? Formal planning might be altogether missing. Often plans are present, but not especially effective or engaging.
An important step in planning is to establish what I call the strategic identity (encompassing mission; vision; unique assets; values and capacity for organizational change). This exercise help builds a cohesive team and so confers a definite psychological benefit.
Next, taking account of industry trends, emerging issues and latest innovations in the field helps ensure plans are well informed. Further, planners must formulate goals and objectives in a precise way to make them meaningful and actionable.
In sum, the risk manager has quite a task in reviewing the quality of strategic and operational planning processes. If this is ignored, then effective risk assessment is scarcely possible.
2. Risk Manager as Researcher
As indicated above, research helps inform plans. Environmental scan identifies not just general conditions, but trends specific to the lines of business. Unless plans are substantiated with knowledge of developments in other jurisdictions or among competitors, key risks and opportunities will be missed.
3. Risk Manager as Facilitator
Risk professionals act as a shared resource to demonstrate the risk identification and assessment process, and to transfers skills to department heads. Facilitation training is recommended, and really essential if the risk champion must lead risk ID in content areas that are contentious and emotionally charged.
4. Risk Manager as Innovator
Opportunity is not just a novel condition to be exploited when encountered by chance. Rather, a structured program of innovation will deliberately seek out opportunity. The aim is to add value to the organization by obtaining efficiencies, process improvements, or new product and service combinations. Risk managers can lead the innovation process.
5. Risk Manager as Scenario Builder
Scenario building answers the planning need when projects entail high future uncertainty and complexity. Scenarios planning — distinct from forecasting — offer an ordered method to check the resilience of plans against various critical futures.
6. Risk Manager as Negotiator
High Quality Risk Assessment, once acknowledged as a tool to solve complex business problems, will be in demand. Contentious proposals can find workable solutions through this risk ID process. The crucial point is to have participants sign off on common goals and values. Good facilitation skills then enter the picture.
In this post we have reviewed the risk professional’s new roles in corporate planning and research; facilitation; innovation and process improvement; scenario building and negotiation.