WINDHOEK, JUNE 11 – Many organisations spend a lot of time and effort building and developing robust risk mitigation frameworks and strategies to handle business-specific risks.
In spite of constant monitoring through dashboards and reports, many still face major and unexpected issues. One of the main reasons for shortfalls in the management of risk is the general attitude towards risk mitigation.
Although organisations are well-prepared with relevant processes and other infrastructure in place, they often struggle when cultivating a sense of risk awareness, responsibility and intelligence into and across the fabric of an organisation, which results in gaps and deficiencies.
The future of risk management lies in an ability to incorporate and inspire more of the behaviours that we want- both the behaviours we want to encourage and those we would like to avoid.
Here are some key elements in Building a Risk Intelligence system:
• Collecting risk intelligence from everywhere!
• Internal and External information gathering processes, including Social Media
• Building internal pathways throughout the organization
• Encouraging clear and unobstructed communication
• Making sure that bad news travel faster than good news
• Knowing what is real and what is fake
Clear and unobstructed communication is very important in a process to collect risk intelligence from everywhere and have internal pathways throughout the organisation where bad news must travel faster than good news.
Risk intelligence demands that every individual in an organisation such as Bank Windhoek and Capricorn Group take responsibility for identifying, reporting and managing risks in its day-to-day operations.
Failure to uncover risks result in organisations simply being unaware of the build-up in risk. Employees often do not flag or report new risks or an increase in risk exposure, often because they just decided that the risk is unlikely to materialise and cause a loss.
As said above in this article’s headline, bad news must travel faster than good news. Getting bad news in good time is always better than getting a surprise when it comes to the management of risk.
A key factor in mitigating risk (or containing the impact) is having enough time to find an effective solution to the bad news. Success is to know that you have influenced your organisation’s risk culture by raising risk implications early in all relevant discussions and throughout the decision-making process!
“Make others succeed” is a key mind-set required for success in building a Risk Intelligence System.
When we look to retain and attract people, we do so on the basis of the skills they have – their aptitude; but when we fire people we do so, in about 90% of all cases, because of their attitude.
So what are the differences between aptitudes and attitudes?
• Aptitudes are our potential to learn skills which we develop and hone through time. What works, you continue using. What does not, you strive to change. However, aptitudes alone cannot take you all the way through the path to success.
• Attitudes determine what and how much you can do. It is like an engine; it can either slow you down or accelerate you whilst still going forward.
The fundamental difference here is that you can train people for weaknesses in aptitude, but you cannot train people out of an attitude weakness. Attitude is internal to the individual and you cannot motivate a person to change themselves, they have to motivate themselves to change.
Think about these, learn to thrive on bad news and don’t accept surprises.
By Horst Simon, Business Risk Officer: Capricorn Group