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Making Risk Sexy

06/10/2017 - Enterprise Risk Management Risk Culture GRC

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This article was written by Vicki Wilder , Board Director, Governance Professional. Edith Cowan University. We are sharing it with the Protecht Risk Management Insights Blog readers. 

sexy
ˈsɛksi’
adjective

1. Sexually attractive or exciting. "Sexy French underwear". Synonyms: sexually attractive, seductive, desirable, alluring, inviting, sensual, sultry, slinky, provocative, tempting, tantalizing; more

2. Informal - very exciting or appealing.
"business magazines might not seem like the sexiest career choice"
synonyms: exciting, stimulating, interesting, appealing, intriguing. Source here.

Have I got your attention?

As our team barrelled down the road in an SUV on our way to a team builder last year, a sign blared “Sexy Salmon Fillets” near a fishmonger. The mind boggles. Sexy (definition No. 1) , I’m pretty sure they weren’t, but topic of conversation they remained for months, so hats off to the advertiser - they had our attention. Given the apparent multiple definitions perhaps they meant that the fillets were appealing?When I said I’d write about risk it was considered by some to be journalistic suicide. “I’ll have to make risk sexy,” I said and down went the gauntlet by a much respected senior colleague. “Write about that” he suggested, innocently.  

Intriguing.

Risk management has been given a bad rap. Risk is more the comfy pyjamas or sloppy joe of business methods, rather than the flash tux or slinky cocktail dress. It’s often done behind the scenes. We know about it and use it, it's a good old standby but when push comes to shove, we dust off the cost cutting initiative or the efficiency drive or the operational alignment, ah yes, one of the many the little black dresses (LBD) of business methods.  

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Let’s examine the informal meaning of sexy. Is risk exciting? If you’ve ever skydived, heli-skied, scuba dived, raced a vehicle or done something you shouldn’t have that was fun without getting caught, I’ll hazard an educational guess you’d rate that as exciting. So, taking risks can be exciting… Check.

Is risk management appealing? Hell yes! When I understand my or my organisations risks I can increase my control over them. If I understand them really really well, I can break them down into itty bitty bits for my stakeholders and explain why we need to do what we need to do, how much it will potentially cost us in all sorts of ways if we don’t AND how to prevent it. I can also show that I’ve followed a diligent process. What’s not appealing about that?  

Every risk database is a treasure trove of cost saving initiatives, unborn opportunities; alignment opportunities and cross-functional performance drivers just waiting to happen. A database full of cost consequences is a cost reduction project in the making - so help me understand why leaders and senior management aren’t insisting this information isn’t project managed in this way, now, in this economically tight environment. That sounds “sexy” to me. What’s “interesting” to my boss is ‘interesting’ to me. Wouldn’t leaders find it “intriguing” to understand what these cost saving sources are and on what schedule they will be achieved? I sure would be “stimulated” to show my Leadership team the value that management can save them thanks to the structure that risk management provides. Check.

A database full of cost consequences is a cost reduction project in the making - so help me understand why leaders and senior management aren’t insisting this information isn’t project managed in this way, now, in this economically tight environment.

You don’t know what you don’t know

If you asked me what a sexy looking person looked like, I might have trouble explaining it, but when they walked past, I’d be able to point and loudly shout “Like that!” before being slapped. Is it different to everyone or is it universal? It can be a bit like that with explaining risks to leadership. They’ve heard it and seen it all before, they are familiar with it, yes reds are moving to yellow etc, etc. The next time you get that uncomfortable feeling in a senior management meeting of “Here we go again” or the audience shifts their attention to their mobile phone, or that poker face they give you when you know they are thinking about the golf game on Sunday (yes you know that look) or the weekend they have planned, perhaps consider something new.  

Sexy Risk - Money

Perhaps consider asking the Risk Manager/Director/Chief Risk Officer to add up all the cost consequences in the risk database and opening your meeting with a declaration of how much value is under management by the organisation and being reported by the risk department, which is in turn being overseen and steered by leadership. (Forget about likelihood here. To get this right, you’ll need a quantitative cost risk analysis). You might get a surprise, or find it "exciting" to understand your role in these hard $ terms.

Example: If I worked on a $45B project and my contract was worth about half of that, say $22B, and I opened a meeting to say I had $7B of risk under management - I’d hope that everyone at the table’s interest is excited, i.e., that the prospect of saving as close to $7B as possible, is sexy

It isn't all about cost of course, but it gives you a model to work with which can be applied to each of the other consequences, such as health and safety; capex v opex; legal impacts. Let me know what you discover. What makes risk is sexy for you?

Vicki Wilder MBA MAICD has over 30 years work experience in computing, metals and mining, infrastructure and oil and gas, and specialises in risk management; business continuity and governance.

Thank you again Vicky for sharing this article with all the Protecht readers.

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