Are You a "Go-To" Risk Manager?

What makes truly exceptional risk managers successful? One feature: they know how to think like businesspeople and understand a business' needs. Most importantly, the “go-to” risk manager is considered part of the executive team. The premium that upper management puts on a risk manager's services can make or break a career.

“Go-to” generally refers to a risk manager with whom corporate business executives want to work, one they can turn to with confidence. They are risk professionals who stand out from the rest for various reasons. The “go-to” label need not be associated with any title, position, or experience. It has a much greater and deeper meaning. “Go-to” risk managers are not all anointed. They earn the moniker.

Performance Is Key

What is the biggest difference between “go-to” risk professionals and everyone else? Performance. Some risk managers cannot seem to earn the confidence of their internal customers. Others, over time, bond with executives in ways that lead to being considered an integral part of the business team.

Certainly “go-to” risk managers have high experience levels. People want to work with “go-to” risk managers because they convey a firm grasp of their specialty and can communicate concepts in a practical way. These are not ivory tower theoreticians. While risk managers are expected to keep up with developments in risk management, insurance coverage, and regulation, not all do. Seasoned risk managers who let their skills atrophy are not “go-to” practitioners.

Stylistic factors also enter in. “Go-to” risk managers are respectful but not intimidated; confident but not arrogant. They are not only capable of understanding upper management's objectives, but also genuinely try to help achieve them. Further, there is a large advantage in being able to say “no” without alienating upper management.

Tough Competition

One major competitive advantage of having an in-house risk manager is that he will know the business. To an extent, risk managers are constantly competing with the expertise of the outside insurance broker. The risk manager should know the business better than the broker. Furthermore, “go-to” risk managers grasp the company's strategic issues. They know what industry competitors are doing and how these actions affect the company.

“Go-to” risk managers also possess excellent judgment. They are business thinkers. They don't just know risk management; they know what to do with it. Other corporate executives will work with risk managers who will put some skin in the game. They want some tempered risk taking. They want risk managers who will provide risk assumptions, practitioners who will give them an idea of what the chances of success are for specific strategies. In other words, they want risk managers who will help them navigate through the vagaries of the court and regulatory systems.

Two additional attributes of go-to risk managers are a strong work ethic and a sense of urgency. Some risk managers may have settled into a rut. They know how much work they need to do to keep busy but they rarely push the needle into the red zone. Risk managers' hours should mirror or exceed those kept by their internal customers. Corporate leaders want to know that their risk managers feel the same sense of urgency that they do.

Don't Be a Naysayer

What keeps risk managers from being “go-to” practitioners? Executives often state that risk managers who are ultraconservative in their approach to business issues deserve the label naysayer. Some risk managers find that the easiest and safest answer to every question is “no.” Always playing it safe discourages upper management from seeking the risk manager's advice and counsel. Playing it safe also signals a lack of creativity on the risk manager's part.

Strong risk management knowledge and skills alone may be insufficient to be a top performer. Naysaying risk managers either haven't learned enough about the company or haven't kept pace with the rapidly changing business environment.

Reorganizations and increasing competition require that risk managers invest time and effort in staying current with the company's strategic approach.

Having an average-to-poor attitude about service is another way to earn the naysayer label. Executives and upper management expect prompt attention. They understand workloads and priorities. What they do not understand is a lack of attentiveness and poor communication. Some executives and upper managers complain that the risk management department is a black hole. Requests for help go in but nothing ever comes back out.

Being a “go-to” risk manager is not about being the most experienced, having the most responsibilities, or holding the most continuing education designations. Top performance is instead a matter of skill, creativity, engagement with the company's problems, accessibility, enthusiasm, business savvy, and a good service attitude.

Keys to Performance Shortfalls

Why do risk management departments and risk managers often experience performance shortfalls? Various reasons exist, including inexperience, inadequate training, lack of clarity about job expectations, or sometimes a fundamental mismatch between person and job. Causes of performance shortfalls can be addressed, making it possible for a risk management department to be full of “go-to” practitioners. To achieve this, though, risk managers and risk management departments need strong and effective performance management programs. The foundation for a successful program is setting expectations and standards high. Performance measurement tools will help chart success. Feedback, coaching, and mentoring also are crucial.

To create this kind of risk management department, practitioners must listen to the concerns of executives and upper management. These are the vital “internal” clients. Risk managers can gain input through regular meetings, as well as through formal and informal surveys. They can and should use client feedback as an integral part of their own performance management system.

Risk-management departments might also consider establishing 360? reviews that include input on the risk manager's performance from peers, support staff, and higher-ups. Gathering such feedback is only the first step, though; analyzing and applying it is essential in the improvement process.

Show Me the Money

Compensation programs can be tied to feedback from internal clients. “Go-to” risk professionals should be promptly rewarded. Decreasing or freezing rewards for naysayers is not the most effective way to improve performance and achieve a go-to environment.

The stakes are high for risk managers and risk management departments when upper management feels that a performance gap exists. A risk manager's reputation is at stake and so too the reputation of risk management's organizational role. Ultimately, however, the company's competitive position is at stake as well. Companies can support a risk management department, or simply outsource it to outside consultants or insurance brokers. Striving for a staff full of “go-to” risk practitioners will solidify the function's role on the organizational chart. It also attracts top talent and encourages everyone to perform at the highest levels.

Are you a “go-to” risk manager? Read and heed these tips to elevate your game and the role of risk management within your organization.

Kevin Quinley CPCU is an insurance executive and business writer. He is an expert speaker and trainer on risk management. You can reach him at kquinley@cox.net.