I am just back from an away day seminar organised by our friends in group compliance. The risk management function is a new one on me but its troops have been granted ’access all areas’ and are slowly wielding their influence. As a senior commercial manager I was invited (well, required in fact) to attend this workshop so that another tick could be put in a box on their compliance paperwork.
Having arrived in a sceptical mood, I was intrigued by statistics that were shared in the opening session. A recent global survey of business executives conducted by The Economist Intelligence Unit concluded that most companies are not sufficiently prepared to deal with the risks they most fear. So what are the things keeping us awake at night?
Among the biggest fears in 2011 are currency fluctuation, overall economic and market risk, the price of material inputs, talent and skills shortages, cyber political criminal and security risks, the cost and availability of credit, supply chain failure, new market entrants and industrial action. And that’s just for starters.
Now, I see it as my job to be a measured risk-taker in an organisation of institutionalised fear. There is no doubting that when things go wrong you can always wish that you had planned better, and those who have lived through crisis management moments will tell you just how miserable life can be.
Fortunately, we now have a department of hypochondriacs whose day job it is to worry about just about everything. Rather them than me, I say.
Having recounted my seminar experience to a very good finance director friend of mine over a beer by the river (don’t worry, we opted for plastic glasses just to be safe) he reminded me that the primary role of the board and senior management in large organisations is to mitigate all risk. It is their job to stop the creative marketing-types like me from doing anything that might endanger the otherwise almost guaranteed safe dividend stream for shareholders. The top people in corporate life are in fact rewarded for a series of boring outcomes. Paid more and promoted for consistent under-achievement. And we wonder why we are useless at innovation.
Look out for the risk police coming to a marketing department near you soon.