This is part 1 of our video series on "Difficulties in Engaging Staff in Risk Management". In this video, David Tattam talks about why it's difficult to get engagement in risk management and what you can do to address this issue.
Hi, I'm David Tattam, Director of Research and Training at the Protecht Group.
Do you have a problem with engaging your front line staff and new employees in risk management? If yes, then you're not alone. The issue we have with risk management often, is engaging the people that should be doing it, your staff.
Everyone is a risk manager in your business, and for success they need to be doing it. The problem is, how do we get everyone to be a practicing risk manager? The answer is, to engage them, but that is difficult. Why?
Firstly, risk management is often seen in a negative light. It's seen as an overhead, and we don't really see the incentive.
And secondly, a lot of people lack an understanding of what risk and risk management is.
In order to engage it, we need to number one, address the negative perception a lot of people have around risk and risk management, and make it enjoyable, make it fun. And secondly, we need to educate people by making risk management real for them.
Addressing the Negative Perception Around Risk
Firstly, addressing the negative perception. Why do we have a negative perception around risk and risk management? Well, let's first of all blame mum and dad.
In the first, 15, 16 years of your lives, or most children's lives, mom and dad tell us that risk is bad. They tell us, we can't do this, we can't do that, we can't have fun. Why? Because of risk, and we need to protect you. We grow up thinking risk stops us having fun, and risk is bad.
Secondly, we go to school, and they show us the Oxford dictionary that tells us, amongst other things, that risk is the possibility that something unpleasant or unwelcome will happen. Not very attractive. So to address this, we refer to the ISO 31000 risk management standard that says, risk is the effect of uncertainty on objectives.
Firstly, the effect can be both positive opportunity risk, and negative threat risk. The opportunity maybe give us a value added incentive. Secondly, risk management, if risk is the effect of uncertainty on objectives, risk management must be managing the effect of uncertainty on objectives.
So risk management actually is, objectives management or outcome management. There's the incentive. Risk management is purely there to help the business achieve its objectives.
Making Risk Management Real
Secondly we then have lack of understanding. Why do we have that in risk and risk management? Because we use big words. We use complex principles, methodologies and frameworks. What we need to do to engage is, keep it real to be able to relate or for people to be able to relate it to their own lives. The best way to do that, I found over the years, is to make risk management applicable to real life.
Please go and join us with a number of other blogs and videos we have, to try and show how risk management relates to your personal or work life, and I hope that helps you engage your front line in doing better risk management. Thanks.
This is the time for a well-developed, well-embedded and well-operated enterprise risk management framework and processes. It is not a time to throw away risk management thinking. It is a time to bring it into action.
Author of 'A Short Guide to Operational Risk', David Tattam is an internationally recognised specialist in all facets of risk management, particularly at the enterprise level.
His career includes many years working with PwC, as well as two Australian banks. His achievements include the creation of the Middle Office (Risk Management Department) for The Industrial Bank of Japan in Australia and the complete implementation of all Australian operations, systems, procedures and controls for Westdeutsche Landesbank (WestLB).
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