6 minute read
The Advisor
AN EXCLUSIVE 4-PART SERIES
PART 1
The four faces of risk
There are four personas that risk teams must be able to play, in order to help their organisations confidently manage risks in the real world; where objectives, design and enablers must work together to protect and grow value.
What should the risk team actually do and how should they do it?
When I talk with people about the role of the risk team, I hear the words ‘oversight’, ‘challenge’, but I struggle with whether these roles can really help organisations manage risk better.
Over time, I have formed a view that for risk teams and risk leaders to really achieve their calling they must focus on helping management be more effective. To support better decisions, enable better responses when things go wrong, assist preparation for the things that cannot be predicted, reduce bias and overconfidence.
For many risk functions, a mindset shift is required to achieve this. New and different skills are required, but first and foremost the mindset needs to be about better outcomes.
What are these skills and capabilities?
There are four personas that risk teams must be able to play, at the right time, to meet this challenge.
So, what is the role of the advisor?
This is one of the traditional roles of risk teams and is often completed through things like facilitation of risk assessments or reviews of business cases.
But this role is more than just helping people fill out boxes in systems or spreadsheets. Effective advisors help management to work through their own challenges, uncover biases and assumptions, pressure test ideas and provide clear and actionable advice – rather than seeking to hide behind frameworks, rules and templates.
To be an effective advisor, you must understand that every risk decision is a trade-off and support the organisation to understand what is being gained and lost for every option, beyond the obvious. A good risk advisor is not measured by their own ideas, but by how they can influence others to develop second order thinking, enterprise awareness and the ability to check and challenge their own bias.
What can you do to become a better advisor?
- Know yourself, your limits and capabilities – the successful advisor is trusted because they are knowledgeable and have insight. Provide the insight where you have it but know your limits (sometimes it is better to be a Connector or a Conscience).
- Always be learning – continually push the boundaries of your own knowledge so that you do have an opinion on new ideas, or on things you didn’t know last month.
- Consider not just what you say, but how and when you say it – advice sticks when those receiving the advice are in the right space to receive it – if you want to be heard, find the right time and the right place.
Ultimately the role of the risk function is about conducting the orchestra, not playing the instruments. Choosing when to speak or hold back, choosing when to ask for more information or accept uncertainty is a key challenge for all risk professionals.
Choosing the right role to play at the right time is crucial, and being able to switch between these roles may seem difficult, but that is the challenge for the risk function. The reward – a seat at the table, and the trust of management to help them achieve their goals.
Read the series
