"Some men see things as they are and say why - I dream things that never were and say why not." George Bernard Shaw
Upon applying for a position of Risk Manager, the question was asked, “What is your greatest strength?” Without hesitation, and after previously considering this inevitability, my response, which rings true to this very day was: “My greatest strength is also my greatest weakness: my passion for the job”. Such is a value of a true Risk Manager. Values, are defined as “In general, important and enduring beliefs or ideals shared by the members of a culture about what is good or desirable and what is not. Values exert major influence on the behavior of an individual and serve as broad guidelines in all situations” (BusinessDictionary.com, 2009). Often my propensity for the responsibilities as Risk Manager has caused others to attribute characteristics such as paranoia, fanaticism, Obsessive Compulsive (OCD), negative, and a host of similar traits that in actuality are a prerequisite for the position. Risk Management is not a job nor a career, but a mission. And that mission can cause a conflict of values with staff, safety personnel, and more importantly, Senior Management. In examination of the realm of Risk Management, the quote from George Bernard Shaw cited previously is, or at least should be the credo of today’s Risk Management Professional. Therein lies the conflict that a true Risk Manager encounters on a regular basis: conflict of values from a cultural perspective.
In order to be an effective Risk Manager, the traits necessary encompass all of the above, but also must be measured in one’s ability to diplomatically navigate the political environment of all organizations from small to large. As much as a corporation seeks to exemplify the Zero Accidents culture that are being promoted through our businesses these days, there is a disconnect between the steps necessary to achieve this unreachable goal, and the realities that a true Risk Manager can achieve given resolution of the conflicts inherent. Achievable goals are improbable, if not impossible if the safety and corporate culture of an organization is not in sync with assessments, analyses and plans born of the creativity exhibited by the true Risk Manager.
First, to examine characteristics of a Risk Manager, it is necessary to dissect each and every aspect of their psyche. Paranoia as a basis for the Risk Management process is reminiscent of the old adage, “plan for the worse, hope for the best”. In viewing exposures and risks of an organization, scenario building from worse case to best case envisions the use of a paranoid mentality since humans are involved. Although the term paranoia from a psychological definition is not the specifics required, some may consider the process of true Risk Management as borderline in practice, especially when considering worse case. Regardless of the application, as a Risk Manager, this approach often proves beneficial in the preparedness of an organization for remaining a viable entity.
Next, when considering a combination of fanaticism and OCD, or what can be construed as one in the same, those professionals who express a drive, perseverance, and determination necessary to accomplish a “mission” tend to be labeled as stated. This in itself, although not intended, has an effect on those less inclined to be out of the ordinary, when in fact these attitudes should be fostered and promoted. If a Risk Manager displays these characteristics in the performance of their function, it is without a doubt advantageous to the organization as not only a preparation, but a contribution to the company’s continuation as a viable concern. In essence, the attitudes presented here are nothing more than a combination of professionalism and aspiration to do what is best for the organization, all of which are admirable traits and should be commended.
Lastly, and as a culmination of everything conceivable lumped into a single classification, the true Risk Management Professional is if nothing else considered negative. Arguably, as I have stated to associates on numerous occasions, it comes with the territory. As a Risk Manager, and in viewing the typical process of avoidance (eliminate), reduction (mitigate), retention (absorb) and transfer (insurance), the development of a program is fundamentally negative. The nature of delving into potential areas of accidents from minor to catastrophic requires a mindset that must dwell on negative outcomes in order to utilize the Risk Management process referenced previously. In addition, as a general rule, there may be historical data to support trends from a frequency and/or severity perspective aiding in the qualification and quantification of possibilities investigated.
From a psychological point of view, and as is a natural expression of humans, negatives are avoided to the point of obsession. Certainly, Senior Management’s focus, in a majority of cases is blinded by their attention to the “bottom line”, which tends to concentrate on revenue rather than expense (often seen as an area of reduction). As has been the traditional view by management, Risk Management is many times seen only as an expense cost center and does not (in their minds) contribute to the profitability of an organization. In fact, a comprehensive Risk Management Program has direct effect on EBITDA by reducing insurance cost, limiting and/or eliminating liability exposures, reducing retention expenses in self-insurance arenas, increasing production through fewer accidents, and creating a culture of care and concern for the health of employees and the company. As is often the case, these benefits of a Risk Management Program are rarely mentioned and as a result recognized.
So where is the conflict of values? Too many times, the process a true Risk Manager engages in creates a conflict with personnel and especially Senior Management based solely on a combination of “The Ostrich Syndrome” (bury their heads in the sand) and “The Boy Who Cried Wolf Syndrome” (self explanatory). Given a matrix of scenarios and their potentials, many situations, although possible may never occur. This phenomenon is analogous to the Gulf Coast during Hurricane Season, even in light of the devastation of Hurricane Katrina. A complacency permeates the organization based on either the scenario has not occurred previously, or an extended period of time has passed since the last incident. Although complacency is one attitude seen, another alternative is management’s opinion that such events are part of doing business and as a result the associated costs are expected. As anyone who has passionately held the position of Risk Manager previously or currently can attest, these encounters are a source of frustration and ultimate conflict within their persona.
Resolving conflicts such as these requires in most cases a Herculean effort on the part of the Risk Manager in order to change the Corporate Culture ingrained as cited. Persistence, determination and most importantly unwillingness to compromise values are paramount to the eventual success of a Risk Management Program. First and foremost is setting a foundation for understanding and education of key management into the quantifiable and statistical benefits possible through implementation. In simple language, a Risk Manager must be able to present the dollars and cents savings potential in terms initially accepted by your CFO and CEO. This requires the use of accounting and finance tools that may be lacking in the experience and education of the typical Risk Manager. In order to show your effect on the “bottom line”, numerous courses and seminars are readily available through organizations and schools both locally and nationally to afford today’s Risk Manager the opportunity for translation into management’s language: profits. This approach is usually more than most Risk Managers are willing to do out of a number of attitudes including fear, inflexibility (not my job), lack of education, and a plethora of imaginary excuses. But in order to be a true and successful Risk Manager, this is one of the courses to be taken in order to limit if not eliminate the conflict of values encountered, and minimize frustration and ineffectiveness. The choice is yours.