What makes a good risk manager?

What makes a good risk manager? | Insurance Business

What makes a good risk manager?

Risk managers can sometimes relate with the Greek mythological figure Cassandra – she was blessed with the gift of prophecy, but was also cursed so that no-one would believe her. One may come armed with all the facts, research, and statistics needed, but if they are unable to convince the major decision-makers in an organisation, then their work is virtually useless.

According to John McLaughlin (pictured), senior managing director of Gallagher’s higher education practice, good stories will hold listeners’ interest, build a connection, and (hopefully) offer a satisfactory conclusion.

“Do you need buy-in from senior leadership to create a policy on a new and emerging risk? Do you need faculty and staff to sign on to following a new policy? Having a good story about what could go wrong if the institution doesn’t have such a policy can be far more helpful than citing a regulation or statistics,” he said.

McLaughlin cited a report by Gallagher, which enumerated several areas where storytelling can be used to support the various efforts led by risk managers.

  • Getting buy-in – risk professionals often struggle to get buy-in from senior management and colleagues. Good and believable stories can help get the point across, while tapping into listeners’ emotions and stirring them into action.
  • Get included – Telling stories can build trust and relationships, as well as change perception of risk management. Instead of being all gloom-and-doom, stories can show risk management as a practical and important management tool.
  • Improve training – According to McLaughlin “most institutional training is dull, sometimes deadly dull. Compliance training is filled with dos and don’ts that few people remember; stories can illuminate the whys and will be retained.”
  • Share knowledge and information – Sharing stories can alert colleagues about risks they may not have been aware of. This will help risk managers be seen as a source of useful information and solutions, instead of a negative Ned or Nancy.

“We may not be able to provide all the nitty-gritty, but many risk managers can make use of real situations in their or a colleague’s institution by slightly changing the details, especially the names of those involved,” McLaughlin said.  

The most important component in developing a better risk management culture across an organization, according to McLaughlin, is credibility, which can be built on both intellectual and emotional levels.

“Risk managers may also want to consider their ‘brand’ within the institution and how it is managed,” McLaughlin said. “Annual reports with metrics and stories can be powerful tools for generating financial support for the department, as well as encouraging peers’ and colleagues’ respect, while providing a solid resource for the insurance market support of the risk management program.”

While they may feel like it sometimes, risk managers are, thankfully, not cursed by the gods. So the next time they need to drive home an important point, whipping up a good story backed up by solid data could be the key to getting the entire organization on the same page.