Effective risk management is like putting together a three course meal

Effective risk management is like putting together a three course meal.

This analogy may sound a little strange but bear with me as I take you through the tips for the chef (manager):

Firstly, you have to ensure you know who you’re cooking for and tailor the presentation and components of the meal to complement the tastes and requirements of those who will be consuming it. There is no point serving a roast for your main course if your guests are all vegetarian or having a Christmas theme if no-one celebrates Christmas

Translation – Understand your audience and tailor your delivery and your message so that it makes sense to them. Also, tailor your solutions to the businesses you are supporting – do not roll out the wiz bang solution if the risks can be mitigated using a vanilla approach. Ensure that tools and frameworks that are simple and manageable to operationalise and therefore embed.

A good meal builds in flavour and intensity, with each course complementing and adding to the previous one. This takes your guests on a sensory journey and keeps them engaged throughout the whole meal.

Translation – Take your stakeholders on the journey with you. Start with the basics and keep building on that so your stakeholders have time to understand and appreciate each component before the next one is presented. For example, ensure your stakeholders understand their risks and have identified relevant controls before you introduce concepts such as scenario planning, risk appetite or risk tolerances. If the foundations are not solid or subsequent components are introduced with no correlation to previous ones, it can lead to the perception that risk management is too complex or difficult.

You need to have the best ingredients. It only takes one rotting tomato to give your guests food poisoning or leave such a bad taste in your guests’ mouths that they do not return.

Translation – Choose the right inputs, people, processes, policies, frameworks and advisors so that when they are all thrown into the same pot, they work together to produce a robust and effective risk management framework.

It helps to have the best tools – an oven that consistently cooks your soufflé, a blowtorch to put the finishing touches on your crème caramel or an egg timer so that you don’t overcook your piece de resistance.

Translation – Set your people up for success – ensure they have access to the right tools, training, subject matter experts and mandate to effectively perform their role and achieve their objectives.

If you are lucky enough to have a sous chef helping you, take advantage of their special skills. If you try to do everything on your own, chances are you will overcook some things and undercook others.

Translation – No-one can do everything on their own – seek help, support, guidance and advice from multiple sources – including those who perform the same or similar role as you; those who are not connected to your function so that they can give you a fresh perspective; and those who will give you their honest opinion if you have missed the mark. Collaborate to address common challenges, share knowledge and explore new ways of doing things.

Although a recipe book can be useful, you should also feel free to experiment – what’s the point of putting all that effort in if you can’t have fun with it?

Translation – Don’t be afraid to innovate! People should be encouraged to try something different and think outside the square.

And finally, as the adage goes, too many cooks can spoil the broth. Accountability is the key component. If we ensure that everyone is empowered and trained to do their job, we should give them the accountability to deal with issues or events and trust that they will do what is required. The organisational culture must support this by actively discouraging multiple people stepping forward to demand visibility of events that are in train, but who step back when actions or decisions are required. A robust consequence management framework will assist with forcing this change, if you are brave enough to enforce it.

Happy cooking.

Guest Author – Alev B.

Alev Bassilios
Alev Bassilioshttp://www.theinnovationofrisk.com
Alev Bassilios is a guest author on the Innovation of Risk. Alev has extensive experience in risk management, legal and compliance, and business strategy. Alev is a lawyer.

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