The Seven Habits of Highly Effective Risk Managers

*This blog is one of our most popular to date and we know the information is important. This article was published in Risk Management Magazine in October 2012 (link to archive is invalid at this time).  

Most business people are familiar with Stephen Covey’s work, The Seven Habits of Highly Effective People, which aims to help people become more effective in attaining goals. Using Covey’s work as an inspiration, this article outlines the Seven Habits of Highly Effective Risk Managers.

Check out “The Seven Habits of Highly Effective Risk Managers” featured article in Risk Management Magazine online.

Introduction: The Traditional Risk Manager

It is a given that a risk manager must be analytical, precise, cautious and results driven. Risk managers are often seen as the gatekeepers to decisions and often associated with the word “No.” We challenge this perception and suggest the Seven Habits of Highly Effective Risk Managers.

The Seven Habits of Highly Effective Risk Managers

Habit 1: Understand Your Role

The highly effective risk manager understands the importance of their role to the organization. The organization’s objectives, its people, and its sustainability should serve as the determining factor for decision making. The highly effective risk manager makes decisions with a consideration to the consequences of their decision to these elements.

Habit 2: Collaboration

Gaining support for your efforts is vital to being a highly effective risk manager. Collaboration should not stop at board level support; it must be holistic and come from every employee. Highly effective risk managers embed themselves within the organization by being part of the whole. They understand the concerns of the director of the board all the way to the custodian.

Habit 3: Ambitious Thinking

A highly effective risk manager thinks ambitiously and challenges the status quo, with organizational objectives in mind. The highly effective risk manager understands that the past does not predict future results and is willing to go outside of the norm to achieve organizational objectives.

Habit 4: Good Attitude

In any position, it is important to care about the people you work with. The highly effective risk manager has genuine concern for the people they work with and they let this show. A highly effective risk manager gets to know their fellow employees, understand their concerns, and exhibit a win-win attitude in their efforts and collaboration with fellow employees.

Habit 5: Be Flexible

No matter the size of the organization, a highly effective risk manager is flexible and able to work with all departments in all situations. The highly effective risk manager seeks to understand the marketing departments need to embark on a new campaign, why the IT department is requesting a new service vendor, and the effects of their decision on the organization’s bottom line.

Habit 6: Be Optimistic

By nature a risk manager must be cautious in their approach. Risk management is synonymous with the word “No”. Most topics in risk management deal with downside risk. The highly effective risk manager understands the two sides of the risk coin, and is able to make informed decisions understanding both the upside risk and the down side risk. Optimism in risk management allows for the highly effective risk manager to expand horizons and open the organization to new opportunities.

Habit 7: An Agent of Change

The highly effective risk manager must be an agent of change within the organization. If a decision has been made, the highly effective risk manager successfully communicates the goals and future successes associated with the change. Further, the highly effective risk manager reduces the friction associated with change by displaying an attitude of confidence that the change is for the right reason, ultimately removing fears associated with change on all levels.

Conclusion

The highly effective risk manager is the link between all departments within an organization. Effectiveness comes from a complete understanding of the organization, its objectives, and the people who make the organization successful.