When it comes to enterprise risk management, I have struggled with ways to engage management. After all, it is not like ERM is an exciting topic…at least for most people. Me, I love talking about ERM!
Most executives or mid-level management focus their days on what they specialize in, whether it is finance, marketing, information technology, or customer service. Risk management is not their specialty. So how can you get them to be actively engaged in what you do?
In addition to the advice I offered on talking about ERM and risk in the language of the business, there are 4 ways I have found to engage management in and sustain their support of ERM activities.
1. Encourage taking risks.
I don’t know how many times I will talk about this (probably a lot more!), but the goal of ERM should not be to minimize risks. ERM, and you, should focus on ensuring that the organization and its management are taking smart risks.
What are smart risks? The right amount of the right kind of risk at the right time. Yes, all three of those “right” situations. Because if it was the wrong amount of risk, then uh-oh. If it was the right amount of the wrong kind of risk, uh-oh. And if it was the right kind of risk at the wrong time? You guessed it – uh-oh again.
So focus your time and efforts on mindset. ERM is not about being the naysayer, the Debbie Downer, red tape, or always saying no. In fact, I love to say, “That is a great idea. And I think it would be ideal time to do this project. The identified risks are within our tolerance, and the opportunities are worth the risk.”
Imagine how many doors will open for you and your team when you start saying those words. You will be invited into discussions and people will solicit your feedback.
2. Focus on the positive.
Speaking of opportunities, I have found that companies have a very difficult time incorporating this into their way of “risk management.” I am a huge fan of ERM, but I know the stigma of it being “risk management” means that people are thinking only about managing the downside.
Instead, I think of it like this. Risk is an uncertain event. That potential event can have a negative effect or a positive effect, maybe even both. That positive effect is a potential opportunity to be pursued.
Is that the only kind of opportunity? No way. There are straight situations or circumstances that can be opportunities, such as a competitor discontinuing a line of products. Another example is the discovery that a current product can be used for multiple purposes, which in turn opens up a potential target market for that product.
Either way, my experiences have been that most clients manage their typical risks pretty well. In fact, sometimes they over-manage because they have been so focused on them. So now, give them a way to show that they can take some of those resources away from the negative and use them to gain the positive.
3. Keep things simple.
Nothing overly complex ever succeeds in the long-term. It is the human factor. If it is difficult, then people do not want to do it, especially when it not their full-time responsibility.
Whether it is the how of ERM or the messages you send out, keep them simple. Give them ways to easily incorporate into their familiar processes. It may take time to phase in more robust processes, but they will welcome gradual changes more openly than drastic changes. After all, resistance to change is a top risk being faced around the world.
Ensure that the messages you send out are easy to read, implement, and use going forward.
Are you asking yourself “what messages?” If you find yourself not communicating with management, whether lower, middle, or upper management, that is a problem because my final piece of advice is…
4. Plain and simple.
Know the preferred communication style for each of the executives.
Just like people have preferred learning styles of video, audio, or reading, everyone has a preferred communication style. Some like written emails, some like documents that are easy to print out and read on the go. Others prefer face-to-face conversations or verbal updates. Whatever their style, adjust to it as best you can.
In my experiences, I have found that most executives like the personal touch of face-to-face communications, being able to see the face of the person talking. Even if it was a 5-minute conversation, it was more worthwhile than crafting a long email that could be confusing or require extensive back-and-forth.
To keep us both happy, I would have that conversation in person, then send a summary email of our conversation with the why, what, the outcome, and the next step. The face-to-face conversation satisfies their preference, and the written summary ensures that we walked away with the same understanding and conclusions. And, for goodness sake, please do not forget to thank them for their time and input!
For those people that you cannot schedule face-to-face meetings, try to use video communications or, as a second option, phone conversations. These are still better options than email for most people. Not only for seeing people faces, but tone of voice is critical. How many times has an email been misinterpreted because the tone was unclear?
Taking these steps can reap huge benefits for your ERM program. You can tell by reading these pieces of advice that they are interconnected. Pause and reflect on how it could be done for your organization. Plan it out. Talk to the executive over ERM about what you want to do and solicit feedback. And then do it.
When it comes to doing big things (or even small things), imperfect action is better than perfect inaction.
What steps have you taken to ensure management is actively engaged? What were the results?
Are you struggling to get your executives engaged in the discussion? Do you only hear “not right now” or “I don’t have time for this”? Give me a call or send me an email, so we can devise a customized action plan to engage your management in ERM.
Until the next time…