While the human psyche is all about striving for certainty and increasing efficiency, resilience is about appropriately handling uncertainty, not just managing it away. Effective leadership can help build that resilience in an organisation. The role of risk leader is to give clarity of intent, maximum freedoms for the wider business to own their decisions, and to encourage the business to take strategic risks.
Effective leadership can boost organisational resilience in a number of ways. Whether it be empowering people to carry out their role – and solve any problems that may arise – or creating a shared consciousness that improves operational risk management and controls, proper leadership is key to any truly resilient organisation.
From the risk perspective, giving people across your business the maximum freedoms to make decisions and deliver objectives for the organisation will drive people’s passion to do their jobs well and help foster innovation within your organisation. Rather than an autocratic approach to risk management (which rarely ends up with positive results), be the leader that empowers the wider business to embrace uncertainty and be an active part of the risk management process.
As part of our series on organisational resilience, members discussed at a recent member meeting the role of leadership to make organisations more resilient. They discussed both their roles as risk leaders as well as the role of management more widely, and how the risk function can support them to contribute to organisational resilience.
Empowering people to make their own decisions – within the proper frameworks – can help to build resilience, should they encounter an unanticipated risk, as they have the required tools for working through the problem and coming up with a decision.
In order to succeed, however, effective delegation must have three key components:
Clarity of intent from the top – this should focus on the required outcomes of the task, not simply how to do it. This then allows people to go away and determine the right process by speaking to their teams and experts in their field, which invariably allows for a much more realistic and robust plan of action
Embrace a shared consciousness – make sure people are fully informed on the important levels of information that they should all have (see below)
Trust – there needs to be trust between teams and between individuals that allows people to get the work done
2. Create a shared consciousness
The key to building a shared consciousness is knowing which information to share so that people are informed enough to carry out their role, but are not drowning in too much data.
Having the right information is vital too. When it comes to resilience, good horizon scanning provides data - and subsequent knowledge - of the emerging risks that could impact your business in the future. A robust resilience framework incorporates this step, and our recently published Emerging Risk Tool and Guidance are helping risk leaders on this journey. The tool collates information from key global sources on emerging risks while the guidance walks members through the processes and techniques other members are taking to build their emerging risk management frameworks.
3. Build accountability
Without the right accountability framework in place, responsibilities fall through cracks and opportunities are missed, leaving a business vulnerable to crisis. There needs to be one individual responsible for each problem, task and outcome, and that person needs to know they are responsible for the actions of that team; as such, they will receive the plaudits when things go right - or otherwise, if something goes wrong.
This accountability means that people also need to be left to carry out a task without constant supervision and interruptions, otherwise trust is broken and the person will not feel empowered to carry out their role. A resilient organisation is transparent in its processes and trusts its people.
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