Risk management is a skill, not the ultimate goal

To those of you who aren’t sports geeks, my apologies. Ignore the specifics … you’ll get the drift.

Why does a world-class athlete practice? Let me get more specific. Why does a basketball player practice a fade-away jump shot 200 times a day? Why does a tennis play practice half-volleys at the net time after time? Why does a football lineman practice his foot work while run blocking dozens of times every day? For the top athletes, it’s not because they want to become the best fade-away jump shooter or be the best at any one of these particular skills.

No. They are focusing on details because it helps expand their overall game. It helps them better respond, instinctively, when they are in the flow of the game. By developing every weapon in their arsenal, it makes them a stronger overall player. Details are important because IT HELPS THEM WIN THE GAME.

Let’s look at “risk management”. I feel comfortable proposing that most organizations approach risk management with the goal of managing their risks. Why not, right? That seems pretty straight-forward. But, that shouldn’t really be the underlying reason for risk management. Risk management, in the business world, is like a fade-away jump shot in professional basketball. It’s a skill. However, it’s not the ultimate goal. The ultimate goal is to win the game.

Every organization (of any type, any size, for-profit or not) has a reason for its existence. Maybe it’s to produce a product. Maybe it’s to serve a disadvantaged group of people. Whatever; if risk management doesn’t help that organization achieve its goals, what good is it?

When it’s approached correctly, risk management is viewed as a skill that needs to be part of the organization’s overall bag of tricks. When it’s approached correctly, it helps the organization achieve its goals. Let me draw a comparison to another fundamental skill. Most organizations have some way of communicating individual performance objectives to their staff. “Bob, this year I would like you to accomplish …”. They do this because there is an obvious and clear link between objective-setting and winning the game. Objective-setting is a skill that helps them win.

Risk Management is exactly the same. It provides another core competency that the organization can draw on. It’s a skill that gives the organization more options. It’s something that helps them perform better, instinctively.

So, don’t focus on the skill as an end in itself. Recognize that the skill should be a well-integrated competency (among many). Winners don’t let their vision stray. They stay focused on winning the game.

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