By Helle Friberg, FERMA board member and Group Risk & Insurance Manager, Hempel A/S
To create an ERM strategy – or update an existing one – for your company might at first seem like a rather easy task. As a risk manager, you often have a very clear vision on how important your field of work is for the company, how advanced you think risk management should be in the near future and beyond, and how fast the implementation should be. It is, after all, your daily life and your work, and perhaps even your passion.
I am currently working on refreshing my company’s ERM strategy. In that process, I have experienced that the task is not necessarily as easy as that.
My starting point was all these good ideas about how “ERM matures” and where I believed the company should be in a few years from now. However, you might agree with me that it is an art to get our fellow decision makers (risk management committee, steering committee, top management or the like) to realise that our view on the company’s future ERM is as brilliant as we think ourselves. This is where I found that communication and lobbying skills are two essential tools in the process.
Why would these two skills come in so handy? Well, we all know that when something is communicated in an inexpedient way, we don’t jump up and down in joy and congratulate the messenger. On the contrary, in business life you might trigger all the wrong discussions and end up with no approval and no commitment.
Instead, once you know what you believe is the right thing to do for ERM and the company, it is essential that the message is delivered in a way that appeals to the audience/decision makers. Some get it; some don’t – I know now that I need to work harder on that one.
The level of risk management should at all times be adjusted to the company’s readiness to embrace the current stages of ERM – and this is where the lobbying comes in.
Now that you have these brilliant ideas about the future ERM in your company, a tool to assess the company’s readiness to rise to a higher maturity level could be called “inter-company lobbying”. By that I mean discussing your ideas with members of your decision-making group, getting a feel of what you can expect to achieve in terms of ERM in the busy working environment and the likely possibility of squeezed resources. Also, you get a feeling of how mature the company is in reality compared to the fantastic vision you have for ERM. The ERM strategy should mirror what the company is prepared to put into the process. Too high goals might easily kill success and that does no good to anybody.
My work reviewing our ERM strategy has just started. However, I feel wiser already – and confident that my committee and I will agree on a good strategy for our company.