For most of the year, it’s go-go-go…
Whether it’s helping management prepare for an upcoming Board meeting, conducting risk analysis and prioritization, or any number of other activities, it can be easy to get lost in the minutiae of helping your company make risk-informed decisions and achieve objectives with confidence.
At some point, you need to take some time to pause and reflect for three primary reasons:
- To prevent burnout (no one wants that!)
- Celebrate the dubs (excuse me, wins)
- Identify ways ERM can improve and deliver better outcomes to the company (because there is always room for improvement)
This reflection is more ‘big-picture’ than simply looking at the effectiveness of risk controls.
Instead, consider this reflection an extension of ERM strategic planning in that this time it is about looking back at the goals set for ERM, assessing where you are in meeting them, and pivoting or adjusting your approach to better meet the company’s needs.
As explained in PwC’s 10 Principles of Strategic Leadership:
Reflection helps you learn from your mistakes, but it also gives you time to figure out the value of your aspirations, and whether you can raise them higher.
It’s possible through this process that you, as an ERM leader, realize you may have been trying to make a square peg fit in a round hole and changes need to be made, such as a change in terminology or better governance and/or oversight.
Although this reflection is best done at different points in the year, the closing weeks of the year offer a great opportunity to pause, reflect, and adjust as you head into the New Year.
Below are five sample questions to prompt this reflection.
- What do you want to start doing?
- What do you want to stop doing?
- What do you want to continue doing?
- What do you want to do more of?
- What do you want to do less of?
PwC’s eBook defines single-loop learning as “thinking in-depth about a situation and the problems inherent in it.” The first three questions above can be considered single-loop.
The last two questions represent what is called ‘double-loop learning,’ a term coined by organizational theorists Chris Argyris and Donald Schon.
Double-loop takes reflection a step further in that it facilitates better understanding of the way you question things. It’s about reflecting on why you made a certain decision, the implications of the decision, and how you apply these insights going forward.
Most people will be pretty good at single-loop, but as Argyris and Schon explain, good strategic leaders are very skilled at double-loop as well.
Not all reflection is created equally though.
The purpose of single- and double-loop learning is to (of course) identify areas of improvement, but it’s also an opportunity to see what ERM has done right as well.
The trap you don’t want to fall into is ‘rumination,’ which essentially means focusing on inadequacies or larger problems to the point of getting stuck. The questions above, especially numbers four and five, provide a way to gain constructive insights while minimizing the risk of falling into this trap.
Practitioners who are able to use ERM tools to help the company build a competitive advantage must have good strategic thinking skills. Part of building those skills requires reflection beyond surface level or ‘single-loop’ learning.
For ERM to be valuable to the business, it must move at the speed of business.
This type of reflection of what ERM does well and ways it can improve in a big picture or strategic way is a crucial step toward improving ERM’s reputation as a reliable partner in ensuring the company’s success…
How often do you reflect on the past, present, and future of ERM in your organization?
Please join the conversation on LinkedIn to share your thoughts and help other practitioners learn.
