What steps can you take to ensure your risk management team is collaborating effectively?

Defining the risk appetite is one thing, but how do you then measure whether your risk appetite is being correctly applied and, more importantly, is it actually helping the organisation achieve its strategic objectives. For me this is where the real challenge comes in.......being able to produce MI that connects the various pieces of information e.g. your risk appetite to your financial performance or to your customer satisfaction

Risk appetite should be closely aligned with the organization's strategic objectives and form part of a wider organisational risk strategy. Consider how different risks may impact the achievement of these objectives and set risk tolerances accordingly. This alignment helps to prioritize risks based on their potential impact on strategic goals.

Risk appetites may be defined for risk domains such as enterprise, strategic, operational, portfolio, program, and project. Align the risk appetites between these domains. There are several ways in which one may analyze and define risk appetite. For example, a project manager may use a list of risk categories (e.g., schedule, budget, scope, quality) and ask each stakeholder to rate their willingness to take risk (e.g., low, medium, high). Another method is to use scenarios to gauge the risk appetite. Describe different scenarios of loss and ask which scenario(s) would be acceptable.

The key to collaborating effectively is to be intentional about it. The risk management team is traditionally seen as the roadblock to project implementation. Hence, it's important to get past this negative image (sometimes undeserved but at times, deserved). So, the first step is to understand the business objectives. Is the project to proceed no matter the risks? If so, how then do we manage it to an acceptable level? Once the team shows its understanding and that it's prepared to work together on meeting business objectives while making sure it's safe to proceed (by putting on the risk management safety belt), both sides can collaborate to reach an effective outcome.

Defining clear risk management responsibilities can enhance risk management team collaboration. This may be achieved through defining the roles based on IIA three line model. The model identifies the Board as the primary stakeholder supported by the three lines; that is, 1st line includes managers, risk champions and staff, the 2nd line is the risk management function and lastly, the 3rd line is the internal audit function. When all stakeholders are involved, collaboration is achieved.

A common mistake made by project managers is owning most, if not all, of the risks. In many cases, project managers lack the knowledge, experience, and skills necessary to define, analyze, and manage the risks. Project managers should assign risks to risk owners, individuals possessing the knowledge and skills needed to develop and implement the risk response plans.

Consider organizational resiliency: incidents occur off business hours, during holidays or when key stakeholders are off. Make sure your emergency communication channels and protocols are clear and trained and that escalation paths are documented to avoid confusion and time loss in these situations.

The most important step you should take to ensure your risk management team is collaborating effectively is to clearly define who reports to whom. The chain of command and chain of the report must be established and clearly defined. There must be a clear understanding of what happens if the superior does not confirm the recipient of the report. Who should get a report in the case that the superior did not confirm the recipient of the report?

Clearly defined roles and, where appropriate, documented processes or timelines is essential in a complex business. Developing bench strength and cross-training to support team members filling in when needed is also very important (whether it be for workload alleviation or personal leave). Allowing lower level staff to provide this temporary help in supervised manner can also be a valuable tool in succession planning and talent evaluation. Providing individuals with challenges (i.e., stretch goals/projects) and evaluating their response is one of the best ways of seeing the cream rise to the top within your organization.

While collaboration is key to manage risk, setting up clear responsibilities/ accountability, using for e.g., RACI framework, is supporting efficient rollout

The most important aspect to assure open communication is to establish a blame-free environment, especially in a team that deals with monitoring, alerting and addressing incidents. Make sure that failures are attributed first to vague/faulty procedures instead of individuals. Individual responsibility should definitely be assigned, but only in cases of clear malpractice.

Regular and open communication within a risk management team serves as the cornerstone of effective collaboration. By maintaining consistent dialogue and transparent sharing of information, team members align their understanding of potential risks, mitigation strategies, and ongoing progress. This approach cultivates a collaborative culture, encouraging the free flow of ideas, swift issue resolution, and collective efforts toward shared objectives. Ultimately, it empowers the team to better identify, assess, and manage risks, ensuring a more robust risk management framework.

The best negotiations happen when all parties come in with their specific objectives and goals along with having an open mind.

Communication is an essential element for successful risk management. It is crucial for teams to communicate regularly and openly in order to ensure that all members of the team are aware of potential risks and are taking the appropriate steps to mitigate them. This includes both proactive and reactive communication, such as identifying risks before they occur, discussing strategies to address them, and sharing feedback on how the strategies worked. Regular communication also helps to build trust among members of the team, which is essential for effective collaboration.

Communication is the most under appreciated tool a business arsenal. Great communication sets expectations to ensure they are met, it also builds trust and allows for a safe space to discuss opinions and improvements opportunities. It can also identify unsafe conditions, actions and deficiencies.

If everyone wants collaboration in the process all parties involved have to be intentional about building it in to the process and being clear when collaboration is not appropriate or wanted. Everyone.

It is important to use appropriate tools and techniques when it comes to risk management. Having the right tools and techniques will help the risk management team to collaborate effectively and reach the desired results. These tools and techniques may include risk assessment and management processes, risk analysis and evaluation methods, risk monitoring and control processes, and risk communication and reporting methods. By using the right tools and techniques, the risk management team can ensure that all risks are identified, assessed, monitored, and managed in a timely and efficient manner. In addition, the team can also create the necessary plans and strategies to mitigate risks and ensure the successful completion of projects.

A common problem in decision-making is groupthink. A powerful, dominating individual drives the decisions. One way to counter groupthink is to reach a consensus by asking for input anonymously using the Delphi Technique. This technique may also be used to brainstorm and capture ideas. Facilitators can gather information through anonymous surveys and questionnaires and share the results after each round. The process continues until a decision is made.

Processes always need to be reviewed, technology and information changes so quickly. If we don’t have a continuous improvement programme we can quickly fall foul of not properly protecting our partners or not complying with changes to regulation. Review and improvement is essential to stay ahead of the curve

In my experience, where lessons learnt debriefs are useful at identifying risks and possible mitigation measures is to consider the frequency of the issues encountered and whether or not these will have serious consequences in future projects or is there sufficient information available to implement a new process that may add to the complexity. Where adaptive learning is critical, over simplification also creates ambiguity.

In my experience, where lessons learnt debriefs are useful at identifying risks and possible mitigation measures is to consider the frequency of the issues encountered and whether or not these will have serious consequences in future projects or is there sufficient information available to implement a new process that may add to the complexity. Where adaptive learning is critical, over simplification also creates ambiguity.

I have a slightly diverse view from what is being stated here ie. To me , managing risk should be a collective responsibility including that of business Finance, Operations etc. All team members should actively contribute to identifying, assessing, and mitigating risks within their respective areas of expertise. Effective risk management requires a collaborative effort involving various stakeholders across the organization. To me whenever I was given the job in various institutions to be a risk leader , I believed that integrating risk management into the broader organizational culture promotes a shared responsibility for risk mitigation. It becomes ingrained in the way employees approach their work, fostering a risk-aware mindset.

Here are key steps can be taken: Define Clear Communication Channels, Define Roles and Responsibilities, Foster a Team Culture, Regular Team Building Activities, Encourage Knowledge Sharing, Regular Training and Professional Development, Clear Communication of objectives, Open Door Policy, Encourage Constructive Criticism, Regular Check-Ins, Establish a Feedback Loop, Incorporate Diversity and Inclusion, Recognition and Rewards.

In addition, it’s important to build a diverse team with a wide range of expertise in the team. Complementary skillsets coupled with a natural curiosity (and regular connection to the business), will make the RM team contribution even more critical and valuable.

Building up a common level of knowledge (I.e. methodologies, language, tools) is step zero. If your team, customers and suppliers have different level of knowledge on what we are talking about, than your failure rate is probability high, by definition.

In addition to the above, key to effective collaboration is the fostering of an environment that is free from silos and barriers, and one that encourages the sharing of learnings, data and insights across boundaries. Quite often we hold a lot of data that we think may not be useful, but could mean the difference between success and failure to another team. Regular check ins can also help facilitate knowledge sharing, as well as minimise duplication of effort. What has been tried and tested in another team could help pave the way to success for yours, or vice versa.