The Secret to Getting Risk Management to Catch On

May 2008 Issue

By Diana Del Bel Belluz, M.A.Sc., P.Eng.

The book Arabian Nightscontains the famous tale of Ali Baba and the Forty Thieves. In the story, a poor woodcarver learns that the magic phrase “open sesame” will unseal the opening to a cave filled with gold that is the treasure trove of a band of thieves. Wouldn’t it be wonderful to have a magic word that you could use to get your people to embrace systematic risk management?

In fact, when most of us think about convincing someone to change their behaviour, we immediately think about the words we will use to ‘make the case’ for change. We look for the convincing case that will unlock the potential for change in our people, just as the magic phrase “open sesame” unsealed the cave for Ali Baba.

This is based on the belief that if we just give our people the right information, they will make the change we desire.  We focus on building a business case that will help our people understand why it is important to change and tell them how much of an improvement they will see in their results if they adopt a new way of thinking about and working with risk.

But there’s a big problem with this ‘convincing case’ approach. Research on change reveals that people rarely change their behaviour as a result of receiving new information, no matter how magical or convincing the words sound.

People change because of two things: relationships & networks. They change because other people change.

When we notice that our peers, our competitors, and our customers are changing, we don’t want to be left behind. Some call it a competitive instinct. Others call it survival. Nobody likes to be the last kid on the block to try the latest thing.

So how do you use networks and relationships to proliferate and enhance risk management practices within your organization? Here are some tips that you can use to build the kind of relationships and networks that will create the momentum you need for risk management to catch-on in your organization.

TIP #1. Locate opinion leaders and build relationships with them.

Focus on those people who are opinion leaders in your organization. Opinion leaders may be people with executive titles or they may be others in the organization that people look up to and follow.

Once you’ve identified the opinion leaders in your organization, don’t revert to your old ways by trying to convince them to adopt risk management. Instead involve them in your efforts, or better still, involve yourself in their world by helping them to employ risk management techniques to solve a problem that they find particularly pressing or persistent. If risk management helps those opinion leaders, they will spread the word.  You won’t need to sell or push the concept of risk management.

TIP #2. Get involved in networks within your industry sector.

If you have teenagers or can remember when you were a teenager, you know that when told she can’t do something by her parents, a teen will reply with, “But Mom, everyone’s doing it”.  Peer pressure is a powerful motivator, even in adults.

We don’t want to be left behind in a competitor’s dust. I am reminded of this at every risk management course or conference I lead or attend. There is always a significant number of participants who openly state that they are at the event primarily to make sure they are keeping up with their peers.

Use your external networks to find out what people in your industry are doing. Look for examples where other organizations are more advanced than yours in terms of the maturity or extent of their risk management practices. Then feed that information into your internal network. You don’t need to craft a business case, simply show your people a comparison of how your organization’s risk management is lagging behind other organizations. You’ll be amazed how this can create a strong motivation to act.

TIP #3. Link-up with your risk management peers.

Research conducted by Risk Wise reveals that many risk management leaders fail to access resources outside of their own organization or sector.

If you don’t get outside your network of close working relationships, you run the risk of creating an echo chamber where ideas reverberate and get recycled. If you hear only like-minded voices, you can quickly get stuck and stale.

To access new ideas that will inspire you to create breakthroughs, you need to seek out emerging concepts and practices from outside your organization and sector.

For example, when programming The Conference Board of Canada’s annual International Risk Management Conference, I’m always on the look out for novel applications of risk concepts in other business disciplines. Besides traditional risk specialty areas such as insurance and finance, I explore a wide range of related topics including governance, project management, corporate social responsibility, leadership, change management, security, pandemic, decision analysis, and communications.

The reading and networking I do with management experts outside of the risk management discipline helps me to identify emerging business trends that risk managers can ride to help promote risk management. The drive for accountability is one such trend.

In today’s world there is a growing demand by stakeholders, boards, and C-suite executives for better performance measurement and accountability for results. Risk modeling techniques can help a manager understand the interdependencies between an organization’s inputs, business processes, and outputs, including a clearer understanding of the underlying uncertainties and risks that can influence an organization’s performance. The improved accuracy of business forecasts and tracking of key performance and risk indicators that risk management techniques provide can help to address the growing and universal expectation for accountability.

If you want to escape from your echo chamber, be sure to read this month's Bonus Resource article by communications guru Liz Guthridge. And check out our ‘Inner Circle’ for Risk Management Leaders.

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The Risk Wise bottom line…

Your ability to influence change lies in the power of your relationships and networks. Follow the three tips in this article to build the kind of strong bonds between people that enable risk management to spread like the dawn:

  1. Cultivate strong mutually beneficial relationships with opinion leaders within your organization. Opinion leaders represent your biggest opportunity to influence behaviour across your organization.
  2. Use external networks within your industry to benchmark your organization’s risk management performance and watch how peer pressure will motivate your people to want to enhance their risk management practices.
  3. To make sure you don’t get caught in an echo chamber, extend your own peer network outside of your organization, industry sector, and management discipline.

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Tell me how you’ve leveraged your relationships and networks to get risk management to catch-on in your organization.

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Diana's Pick

Neuroscience and the Nonprofit Manager (written by Andy  Segedin and published in the NonProfit Times) shares some of the tips on how to counteract common biases and habits that impede effective decisions.

The article is based on a workshop that Diana Del Bel Belluz of Risk Wise presented at the 2015 Risk Summit organized by the Nonprofit Risk Management Center.