Your organization has long had a risk management department or an insurance department. Now that leadership is committed to having enterprise risk management embedded into the organization, you are struggling to get buy-in on how this idea is different from what you already have. How do you overcome this to achieve success with ERM?
People have pre-conceptions about the ERM approach because they have heard so much talk about risks consisting of building issues, potential lawsuits, and workers’ compensation. When the dreaded “r” word (risk) is mentioned, people start cringing and wanting to hide, thinking their work is about to be analyzed or they will be asked to do so much more work.
You, as the risk professional, know that ERM can only benefit from this idea. Yet you struggle with getting people to understand and buy-in to the differences. Because after all, they are both “risk management” – right?
No matter how much planning goes into the program, risk management professionals must consider how people perceive the ERM program.
The reality is that part of the preparation is branding the ERM program. Although you are doing enterprise risk management, you are also going to be a marketing professional. Messaging to executives, the board, management, and front-line employees is so critical to the success of the program. They don’t need the nuts and bolts now, they simply need to know the why, or value proposition, of the ERM program.
The first step in marketing the ERM program?
Stop using the “r” word!! Check out this article from Norman Marks to learn more about this idea.
Sell them on the benefits of the program, such as those outlined in this article on how ERM is different from “traditional” risk management.
Use research on well-known companies who have ERM programs to communicate the potential of ERM. For example, a study on companies with mature ERM programs shows that these firms realized a 25% valuation premium. What company wouldn’t want that?
Your ERM marketing materials could also mention how ERM can benefit strategic and resource planning, like this article discusses.
And don’t forget to mention that you are also evaluating existing processes to avoid duplication where possible. Some hints on that topic are discussed in my last post.
Where have you experienced ERM Program reputation hiccups in your organization?
Please share your thoughts in the comment field below, or join the conversation on LinkedIn.
Does your organization’s ERM program need to fix its reputation? Do you want to ensure the ERM program gets a successful start? Contact me today to discuss how I can help.