It’s amazing how technology has developed and changed our working world over time.
Imagine trying to run my risk and strategy consulting firm without tools like Zoom, Box, Slack, and other ERM-specific technology tools. There is no way we would be able to serve our clients the way that we do. Just consider how the smartphone, portable laptops, and cloud computing have radically changed how we work just in the last few years.
Advances like these and countless others are impacting virtually every area of a company, including risk management. And those who fail to adapt to this reality will most assuredly face displacement in the years ahead.
In past decades, a risk manager’s job was more formulaic or technical. These individuals would need to know, in a nutshell, how to identify risks, conduct an assessment of those risks, and prepare reports for business units and executives.
But as I explain in this article on the impacts of the Fourth Industrial Revolution on the risk management profession, AI, machine learning, robotics, and ERM software systems are automating or poised to automate an ever-increasing number of tasks like these. Similar to other periods of time like this, the Fourth Industrial Revolution will cause massive disruption by automating most, if not all, of the most repeatable and standardized tasks we currently associate with risk management.
What this means for our profession is developing and honing skills that cannot be replaced by computers, software, or some other technology.
I’ve written about different personas of an effective ERM professional and other soft skills like emotional intelligence, strategic thinking, and relationship building in the past, and these skill sets are more important than ever. But the new reality is that risk professionals must adapt to remain relevant in an era of rapid technological change.
This specific point was the subject of an interesting session entitled Your Future as a Strategic Advisor – The Human Skills that Computers Cannot Easily Replace at 2021’s Risk Revolution online summit hosted by Satarla.
Hosts Jane Walde and Mark Turner first discuss the different mindsets of risk professionals and executives. They explain how leaders are creative, hopeful and focused on success. They can be characterized as storytellers who use imagination to chart a future vision for the company and then set strategies and objectives to turn this vision (i.e., their future story) into reality.
Risk managers, on the other hand, tend to be pessimistic, at least traditionally. Many tend to focus on preventing failure rather than ensuring success, which is a mindset that is the opposite of executives. Historically, our efforts have been very process-oriented, which does a great job of satisfying regulators and ratings agencies, but is not so helpful in creating a competitive advantage for the company.
When executives bring their vision forth, instead of saying “we can achieve this if we take these actions,” too many risk managers will start poking holes in the vision by saying “here’s a problem, there’s a problem, everywhere there’s a problem” (or at least that is the impression many executives have!).
To begin addressing this conflict, Mark Turner puts forth the following suggestion that has been echoed here and elsewhere…
What does this mean in practical terms?
Both hosts explain how a risk manager’s role is rooted in the “story” executives are telling, helping people understand how objectives will turn this story into reality, and ensuring the story stays grounded in truth.
Risk managers need to be compelling story tellers on how goals can be accomplished in both current and foreseeable circumstances.
To develop this “storytelling” capacity and shift into more of a strategic advisor role in their companies, risk leaders need to make an earnest effort at developing relationships and other soft skills. Many things like asking questions, actively listening, developing a rapport, and so on are essential human skills that technology cannot replicate, at least for now…
I highly recommend watching the entire session for more, plus a couple of parts where the hosts engage in mock exchanges between an executive and risk manager. Thank you to Satarla for what I hope is a thought-provoking session for risk professionals across-the-board.
There’s no doubt AI, machine learning, and other technological advancements are already having and will continue to have a profound impact on risk management and our world in general.
How are you as a risk professional adapting and developing skills that computers and other technology cannot replace?
If you have anything insights on this important topic, I invite you to leave a comment below or join the conversation on LinkedIn.
Also, if your company is trying to improve its risk management function to provide more timely insights to executives and other decision-makers, please don’t hesitate to send me a quick message or schedule a call through my online calendar today to discuss your specific situation and goals for the future.
Receive our Weekly Blog Updates
Helping companies achieve their vision and strategy, and succeeding in today's turbulent world, is something I'm honored to be a part of. Whether you're an occasional blog visitor or a long-term client, thank you for letting us be a part of your journey.