Why are we still on this path of self-destruction?

Unless we get out of the dream world we live in, the time is surely coming when risk practitioners will hope they were never born as they face the firing squad for the murder of Enterprise Risk Management.

Most are still on a mission of nursing the 3LoD model through intensive care, refusing to let go and hoping it will survive. It is such a great thing, everybody is using it! Yes, get it well if you can and then continue to use it to drive no value, focus only on protecting what is in your little kingdom and accept that those living outside your business kingdom will just exploit you to a point of no-relevance and death, destined for the corporate graveyard.

We will put up a tombstone: RIP due to RTC- Refusal to Change.

Way back in 1993 an article in The Economist stated: “In the workplace of the future, the fiercest competition may not be for customers, but for the hearts and minds of employees”

Back in 2005 Jaime Caruana, then Chairman of the Basle Committee, said: “In a world where change is the only constant, success depends on the depth of our awareness of the risks and rewards on the horizon and on the quality of our preparations to respond to them appropriately”

From more recent research we know: “Knowledge and skills age so rapidly that the likelihood of employee error approaches 100% by the end of a five-year period” Kevin Hadlock, Moody’s Analytics, August 2015

Therefore, anything older than five years are irrelevant to today’s business environment, including that MBA that cost you almost a year’s wages. Despite all the warning signs, we just do things the way we used to do them for the past 15 years, happily running on the path to self-destruct. We continue to worry about how much petrol was in the car last month and how great our dashboard look, driving our businesses forward into the on-coming traffic without looking through the windscreen.

Let us forget all the jargon, bad practices and even some of the so-called best practices. There is risk in everything we do, there is no need for ring fencing and there is no need to dream up new names for old things. There is no such thing as Conduct Risk, conduct is the outcome of bad or good people risk management. We have to stop creating confusion by just calling known things by new names. We have to stop risk management practices that irritate people rather than motivate them. We have to stop our life-mission of converting historic data into risk reports, useless corporate Red-Amber-Green works of art.

We have to accept that our “tested” Business Continuity Plans will not be followed by any natural disaster and that the Cyber Criminals might already be in our networks, we just do not know it yet.

We have to stop reacting to senseless propaganda and an onslaught of fake-news.

We have to stop analyzing and reporting the past and start predicting the future.

We have to stop following trends and so-called experts blindly, especially those surveys that gives you the list of the top ten risks for the year. The only top ten risks you have to worry about are the ones that will prevent you from reaching your business goals, not the ones identified by some Big 5 place in a targeted survey of their customers.

Sadly, even those who claim to be experts sometimes publish pure junk like this:

“The accountability for conduct risk falls squarely with the chief compliance officer (52%), reflecting the fact that some of these risks are predominantly associated with being non-compliant with laws or regulations” *

No wonder we have major accountability problems in organizations where we syndicate some of the most important decisions in a committee without driving any individual accountability and then we try on the other hand to keep one person accountable for the actions and behaviors of every individual in the organization. There are no such super-humans on this planet and committees will eventually kill businesses.

You can stay as you are, or you can break away to the Future of Risk Management.

*Source withheld, but available