Positive risk thinking has gathered pace - risk is no longer a four-letter word, but there’s still a way to go. As risk leaders, we see first-hand how decisions, taken in a vacuum - ignoring key information and disconnected from final outcomes - can wreak havoc. Whereas collective, speedy decision making, with risk and end outcomes in mind, can develop into large and impactful results for organisations.
The Snowball Effect’s central premise is that the opportunity starts from individual ideas, gathering knowledge, connecting people and collaborating to solve problems and deliver innovative solutions. It’s seeing risk in terms of opportunity, agility and shaping the future, rather than purely risk registers and processes. Why does this shift in risk need to come from a wellsupported middle and, what does this Snowball Effect approach means for the future of risk?
In this article, we look at the evolving role of the modern risk manager, and the cultural shift needed to embed The Snowball Effect into your organisation.
Why today’s CRO is on speed dial
Our first Risk Intelligence (RQ1) white paper identified the risk intelligent leader, and in fact, it’s these same leaders - innovative, collaborative and visionary – who have their Chief Risk Officer (CRO) on speed dial. So, what are the factors – cultures and qualities - shaping today’s exceptional manager?
Decision–making and accountability - First, let’s contextualise. Middle managers find themselves in a challenging position, reconciling business expectations with frontline reality. By definition you need to be able to think about multi-dimensional problems. Today’s risk manager has to be 100% clear on decision-making accountabilities and responsibilities – this isn’t moving decision-making to the next level, who then dodge the decision and escalate to the next level.
For The Snowball Effect to work, senior and middle managers must be joined up, thinking in terms of leadership and governance as they support – and drive – key decision-making. And, because the expanding influence of risk requires a new culture of growth, senior leaders
Empowering the middle - Our experts found too that increased risk intelligence corresponds with a movement towards empowerment. Again this means a shared understanding of your risk framework, risk appetite and risk response – a macro view of risk as it flows downstream.Leadership is key here – allowing for autonomy, ensuring risk is part of strategic planning and creating an environment where risk managers are empowered and able to thrive. Leaders need to share their vision while recognising the contribution that middle management makes.
Investment is important too. Successful middle managers need to be valued and developed. Coaching and mentoring is a big piece of future-proofing your organisation as you build your talent pipeline.
Creating a culture of diversity
Again, this ties back to that very human approach: people development, relationship management and a genuine mindset towards change. As the future of work evolves before us, recent times have shown how essential having diversity of thought is – mixing demographics, disciplines and job titles to inspire new questions and discussions.
Don’t get caught in your organisation’s old ways of doing things – it’s the innovative organisations that are willing to invite new ways of thinking. To fuel conversations around what could be possible rather than what is. Swap outmoded reporting indicators for new ideas.
Embrace ideas generated from different experience and background. Reverse mentoring is an excellent way to do this. These are the specific trends shaping the new environment for risk managers. To the core point of The Snowball Effect, successful risk managers need an open, collaborative, forward-thinking culture to truly thrive. Again in the whitepaper, we drew on the experiences and insights of risk leaders to identify six core pillars shaping this exciting new narrative. Taking each of these, your organisation can develop an innovative, future-focused risk strategy.
1. Risk is a behaviour, not a process – We’ve already shown that modern risk is no longer limited to a set of processes or registers. Today’s it’s a culture driven by a way of thinking, a set of behaviours that have shifted and grown into a solutions-led space. Through our work with risk leaders and changers, we know that for risk intelligence to thrive at the centre of an organisation, transparent and open cultures are essential. Underpin this with realistic performance reporting, where people feel safe – are encouraged - to challenge KPIs and data. Ensuring programs and projects are set up with scopes that are manageable and have, clear gated decision-making will also drive accountability and visibility.
We know that historical behaviours – especially in the world of risk - can often hold organisations back. In risk, the typical focus is on lessons learnt. Throughout The Snowball Effect, our experts called for a broader, more future-focused approach. Again, what we’ve learnt recently – and continue to learn – is that the past can’t always be a predictor for the future. If we encourage middle management to look at new ideas instead - new technology, people, and ever-changing markets – we prevent that fear of the unknown leading to missed opportunities.
Collaboration creates a new language for risk - Positive communication is another facet that today’s risk managers must embrace. Great, outcomes focused communication plays an essential part in cultivating a culture of collaboration. The best risk managers set themselves apart with powerful communications skills. Repeatedly, our customer community sees the most success when managers share their vision for a project and how to achieve it strategically. And, progressive managers are stepping out of working in silos, building networks and getting curious about better ways of doing things. Which is where collaboration comes in.
The Snowball Effect found that successful risk managers collaborate to uncover both risks and opportunities. Equally, they celebrate success to help their organisation understand the importance and value of risk. Collaboration goes so much further than the technology you’re using, too. It’s investing in relationships to create a cornerstone of trust. It’s the being human, again.
Risk maturity matters - Across the board, our findings recognised the value of risk maturity as a key driver of success. This is particularly apparent in organisations with a deep desire to drive change and create impact.
In addition, risk maturity also supports a greater degree of self-governance. By engraining risk in your culture, it becomes less about managing negative threats and more about identifying and seeking out positive opportunities to sidestep those threats. This is the direction of travel for innovative, resilient organisations.
Effective organisations build risk thinking into their DNA.
A better understanding of risk also gives individuals a greater capacity to accept uncertainty as well as ownership. When every risk has an end owner, it can be shared, mitigated, and ultimately, resolved. This self-governance becomes a powerful enabler.
Normalise a culture of risk decisions
Rather, it’s understanding the impact and consequence of both taking action, as well as not taking action. Essentially, both are a decision that can have positive or negative outcomes. What we know is the snowball effect of not making a decision, can also be a threat. How can you broaden the conversation and move the discussion from risk management to enabling leaders at all levels to make better decisions? We know that success happens when we reframe the understanding of positive risk in terms of success outcomes.
For me, it’s this final point that emerges as particularly compelling. We need to encourage people to talk constructively about risk – it’s time! Make it fun and exciting to discuss the future and re-imagine the opportunities of collaboration, innovation and connected thinking.