This was the year in which everything changed, and in which the importance of the risk profession has been highlighted. Business plans drawn up in January had to be scrapped, and new ones hastily drawn up, in March and April as large parts of the global economy were switched off in response to the Covid-19 pandemic. Even some sectors that have thrived, such as food retailing, had to make major adjustments to their way of working – introducing social distancing measures, investing in protective equipment, and adjusting to unpredictable swings in demand.
The events of 2020 ought to see risk practice change its profile, becoming closer to strategic planning, rather than a regulatory, compliance profile into which it can appear stuck, especially in the regulated sectors. There is a long-established practice of scenario planning and wargaming as a strategic function. Nonetheless, in practice the risk function can still get positioned as a defensive discipline only, without using its proactive offensive skills.
This has long been a challenge for trainers, keen to expand their repertoire and highlight the contribution of risk management as a potentially creative discipline, combined with analysis of both threats and opportunities. This is the perspective of Joachim Adenusi, Founding Partner of Inspirational Risk and Management Solutions Ltd (IRMS), who acknowledges that ‘risk management is something people don’t want to do’.
He adds: ‘It’s done mostly from a place of compliance. Hence, training has sometimes come as a result of a perceived need, or a gap or a problem. It’s not seen as exciting. People would instead want to talk about other things such as a lack of resources and many more problems but missing out on the insight that risk management training offers in resolving all these challenges.
‘You have to make the benefits clear, to go beyond compliance and protection. I think the key for me is to be able to demonstrate how risk management can be used as competitive advantage … It’s about handling critical change, meeting personal goals and objectives, and then delivering organisational strategic plans.’
This means a different mindset, bringing the risk function closer to scenario planning and other aspects of strategic planning. In this integrated approach, threats and opportunities are considered together. Organizations badly affected by lockdown can get stuck in crisis mode, and at some point, they need to move out of this into a growth phase. What does this mean in practice?
‘Say your sales dropped 50% this year, or even 80%,’ says Mr Adenusi. ‘Take airlines, the question is, what are we going to do now that people are starting to fly again? How quickly can we ramp up the sales? What should we be doing now? What are we doing to reassure people that it’s safe to fly? The moment it opens up more [you need to ensure] sales guys are not just thinking about surviving Covid, but what to do to get even more business.’
In addition to this challenge in terms of the content of training around risk, there has been the rapid learning in adapting to the virtual classroom. Trainers have had to adapt, which means learning new techniques and approaches.
‘When I did face-to-face training, I would use humour, tell jokes, you talk about yourself,’ says Mr Adenusi. ‘And there is body language. When face-to-face you can read the class. But virtually all you get is the headshot, sometimes people turn the video off. So how do I ensure the same level of enthusiasm? We have to learn new skills: activities to engage the brain: quizzes, asking questions in the virtual space, use of videos.’
You cannot replicate the benefits of face-to-face communication, so it is better not to try. The smarter approach is, when constrained to using internet-based technology, deploying them to their best effect. There are more options than video and chat:
‘You can do online voting: for example, asking delegates to do rank four variables they are most concerned about. Then you can ask them why out of the four variables, one came out on top.’
Not only will a more engaging approach to training lead to better short-term outcomes, it is also more likely to enhance the ambition of risk professionals to become more positive and strategic in outlook; able to offer insights into sales strategy and product positioning as well as avoiding litigation. ‘If we only focus on the downside, risk management as a discipline will be a depressing subject,’ says Mr Adenusi. ‘Instead, we need to look at opportunities, innovations, and different ways of doing things; new ways of working.’
Joachim Adenusi MSc CFIRM
Founding Partner – IRMS Ltd (UK)