When my blog was still pretty new, I published in early 2017 an article on the qualities of an effective ERM professional.
Three years may not seem like a long time, but it is when considering how fast things are changing. Although the original article contains information that is still relevant today, I felt it could use some updating to better reflect the current state of ERM and where things are headed.
When the original version of this article first went online, my approach to ERM was pretty standard, which means developing it as a separate process. But as I explain in a recent article discussing NC State’s annual State of Risk Oversight report:
…as long as ‘ERM’ is considered a separate activity from managing the company, executives will continue to see little strategic benefit.
Before jumping into the personas though, there’s a distinction I want to be clear on…skill sets versus traits.
Multiple posts on my blog discuss different skill sets that an effective ERM professional should develop and always hone, including:
- Relationships: A Common but Fatal Mistake of Risk Management
- Listening and Reading People – Two Underappreciated Skills Crucial to ERM Success
- Expanding your Abilities with the Growth Mindset
- Maximize your Impact as a Risk Professional by Developing Strategic Thinking Skills in 4 Steps
- 4 Considerations for Building Effective ERM Presentations
- Handling Unrealistic Expectations of Enterprise Risk Management
Skills like this can be developed through training, formal education, or personal and professional experiences.
Traits on the other hand are basically “…features of your character” and can be much harder (if not impossible) to change.
Wearing different hats or personas is an art form that can take years to finesse because it often involves going against traits that are an integral of who you are. Todd Herman, a high-performance coach and mental game strategist, wrote The Alter Ego Affect to help people overcome this challenge of fulfilling a role that goes against your comfort zone. Who doesn’t want an alter ego?! (Todd’s alter ego is activated by the fake glasses he wears sometimes. And my sister’s alter ego is Wonder Woman.)
This really intriguing book helps you “identify your deeper character traits and values to create your Superpowers” so you can act with more purpose and conviction. Don’t let a new or challenging persona keep you from pursuing your dream or achieving your goals.
Although most of the following labels were in the original article, I’m modifying the descriptions to better reflect today’s circumstances and adding one that I believe delivers the greatest impact for long-term success.
Persona #1 – Architect
The first priority of a real world architect is to ensure everyone is pleased with the look and feel of the building they’re designing. An effective ERM professional is much the same…
Executives are not interested in following a particular ERM standard – if it isn’t something that gives assurance the company will achieve its goals, they will see ERM as just another compliance exercise for satisfying regulators.
Instead, ERM professionals should figure out what currently exists to see how they can improve management’s practices to ensure risk is being embedded into not just the day-to-day operations of the company, but the decision-making process as well. What needs to be added or changed to make it better? A quote from Norman Marks I reference in a recent article is especially relevant…
…figure out what the organization needs from us if they are to be successful, and then deliver it (pull) – instead of doing what we think is right (based on industry or professional standards) and hoping that once we “push” it at them they will see some value.
Although knowledge of standards like COSO or ISO 31000 can be helpful, this should not be what drives a company’s ERM practice.
Persona #2 – Facilitator
An effective ERM professional understands that they are not simply taking an enhanced traditional risk management approach in the form of minimizing losses. In order to play a valuable role, they must focus on how they can help ensure the company’s success, not simply avoid failure.
However, they cannot do this alone.
A big part of the risk professional’s job is to facilitate conversations among various stakeholders throughout the organization. Anyone can get some people together in a room to talk, but in order for any conversations to be of benefit to the enterprise, the facilitator must make sure everyone has a voice, the right questions are being asked, and the right topics are being covered. Someone with this ability will observe how participants interact with each other and pinpoint any changes that need to occur in order to ensure a productive meeting.
In the book Moments of Impact, effective strategic conversations “…do at least three critical things: bring together the right perspectives, create a common platform for collaboration, and carefully lean into the most important differences of opinion in a way that sets off a ‘controlled burn’ of contained and productive conflict.”
This is not about gaining consensus or groupthink. In fact, groupthink will sink your organization fast. You need people who have different opinions because that means they see potential roadblocks and opportunities that others don’t see. Harness these differences to bring success to the organization.
Persona #3 – Coach
Although the word ‘risk’ is embedded in our title, risk professionals should think of themselves as an internal consultant there to coach or advise executives, business unit managers, and other stakeholders. The evolving role of an effective ERM professional is to provide advice and perspective, not to give thumbs up or thumbs down on a particular topic, project, process, or strategic decision.
It’s important to note that effective coaching doesn’t happen in a large group, but in a 1-on-1 or small group setting.
Consider what an athletic coach does…they hold their players accountable by ensuring they execute and repeat the right behaviors until they become habit, while correcting methods and approach.
My son’s workout coach is a great example…he encourages but is also strict. He ensures his students have the correct form, pay attention/avoid distraction, and follow directions.
A “coach” in the context of ERM does much the same…
In my experience as both a practitioner and consultant, one of the biggest challenges is ensuring everyone stays focused on the task at hand. (Now, with my son’s coach, there is discipline in the form of push-ups and plate pushes for anyone who doesn’t have right behaviors…but that is not our role within our organization.)
Persona #4 – Communicator
The ability to communicate in a way that everyone in the company can relate to is one of the most vital personas an effective ERM professional. This means using the language of the business rather than risk terminology. Doing so will make risk management into something meaningful and beneficial to the organization, not just another compliance exercise.
As Hans Læssøe explains in this article on the future of risk management:
Start learning, if you have not done so already, the language of the business. Measure (risk) in terms of business performance metrics and replace impact, likelihood, velocity, vulnerability, etc. with net present value, profit, return on sales, or whatever performance parameters the company is using.
The key to learning the language of executives is to get to know them. As I explain in the original article on this topic, one of the qualities of an effective ERM professional is the ability to build trust and respect. If done haphazardly, executives and business unit managers will feel like their job performance and judgement are being questioned.
The book Consulting on the Inside: A Practical Guide for Internal Consultants builds on this concept when it says:
To be a really effective communicator, you need to understand the worldview of the people you are communicating with. What are their values, needs, goals, motivators? A message will be more easily heard and accepted if it is framed in language that is understandable and meaningful to the other person and that is consistent with their values and beliefs.
Persona #5 – Influencer
This final persona did not appear in the original article, but in preparing this piece, I wonder if it should be considered even more critical than a communicator.
Although tone at the top is a key ingredient of any ERM effort, you should understand that an influencer doesn’t always mean a C-suite executive or someone with a lofty title. At the end of the day, the goal of communication, coaching, and facilitating is to influence behaviors, decisions and the ultimate direction of the company.
Also, influence is not the same as persuasion. In the book Influencer: The Science of Leading Change, the authors discuss how:
…the key to success has little to do with pep talks, bribes, or sermons. Instead, success relies on the capacity to systematically create rapid, profound, and sustainable changes in a handful of key behaviors.
This particular persona will be discussed in more depth in an article sometime in the near future, so stay tuned!
An effective ERM professional isn’t something you necessarily train for before taking on this sort of role. Although there are academic or other training programs available, many of the “mechanics” of the ERM process can be learned as you go.
And while these personas can be developed to some extent over time, an effective ERM professional will need to possess at least some capacity for each of these if they are to ultimately influence the future of the organization.
For more, visit Are Internal Risk Professionals Treated Differently than External Consultants?
What other personas or personality traits do you feel an ERM professional should possess in order to be effective?
Share your thoughts and experiences by leaving a comment below or joining the conversation on LinkedIn.
And if your organization is searching for or looking to develop someone internally for this type of role, contact me today to discuss your specific situation and goals.
Featured image courtesy of August de Richelieu via Pexels.com
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