Is it time to say goodbye to “Risk Management”?
This might sound like heresy coming from someone who has lived and breathed risk management over the past 15 years, but hear me out . . .
This four-letter word evokes a shiver down the spine from some executives, a bored reaction from others and sense of “HQ coming to our ‘help’” from yet another group. Despite a lot of investment in a more leadership driven “perfume”, it still has a whiff of academia and abstract business philosophy to it.
Despite the essential nature of risk to decision making and successful business outcomes, and the years of education and “hearts and minds” work from advocates, “risk management” is still perceived as a barrier to business progress, diverting from the “real job” of running the business.
In an article by former Chief Audit Executive, author, blogger and risk management thought leader, Norman Marks, it is suggested that this ‘doom management’ approach might be better replaced with ‘success management’.
We know that effective risk management is about getting ahead of what might happen, both good and bad, that could affect the success of the business.
We KNOW that effective risk management is NOT something performed by specialists in an ivory tower, far from the front lines of business. It is the essence of all management and leadership, and a pre-requisite to sustained financial performance and shareholder return!
I have long advocated a focus on “risk informed decision making” rather than “mitigation” or “management”.
Maybe “Managing Successful Business Outcomes” is a better label and risks are just variables to be considered and addressed in that context?
The management concept of “critical success factors” has been around a long time, and embodies this mindset, “What must go right” to achieve our objectives; It is certainly a more positive, outcome-oriented way to describe risk.
Maybe it’s too late to ditch the four-letter word?
Maybe, just maybe, we have already crossed the “Rubicon of Risk Management” to a world where it is accepted as an essential business practice across every discipline.
What do you think? Does it matter?
It’s not just a semantic debate. Norman argues the angles is his own inimitable way in a thought-provoking post, which you can read here