Magazine article Risk Management

ERM and the Art of Motorcycle Adventure

Magazine article Risk Management

ERM and the Art of Motorcycle Adventure

Article excerpt

This summer, I took a six-day motorcycle trip through Montana and Wyoming. While touring some of the most beautiful parts of the country, it struck me that operating a motorcycle and implementing ERM have a lot in common. On the road, the continuous monitoring of your speed, body posture, the weather and road conditions, the lane you are traveling, other vehicles, and the surrounding landscape can help you clear your mind and focus, allowing you to achieve a sort of Zen-like state where both you and the motorcycle are in tune.

ERM offers a similar peace of mind that risks and opportunities are being addressed, that you are moving the company forward with a specific focus, and building an organizational risk culture that employees, clients and shareholders will appreciate. For the best ride, on both a motorcycle and while implementing ERM, it is critical to:

Hone your instincts. Your senses are keener on a motorcycle. While riding, you can smell the freshly cut hay of a farmer's field, feel the vibration as a train rumbles alongside you and generally notice the little things that might be missed in a car.

ERM provides a similar experience, giving you an enhanced ability to laser in on details that can be missed with a more traditional risk management approach. ERM professionals often become more in tune with their company's views not just on risk, but on the underlying business direction the company wants to take and, in turn, they develop a heightened awareness of opportunity and risk surroundings.

Plan ahead. There is a great deal of planning that goes into a motorcycle trip, including mapping out your route (always allowing for the unexpected), identifying the locations of fuel and resources along it, packing appropriate clothing for the weather, and ensuring you have emergency items and a motorcycle repair kit (i.e., duct tape and WD-40).

ERM also requires intense planning. Where are we going? How long will it take to get there? Is this journey with a group or are you going it alone? Do we have alternative routes mapped out? Have we planned where to get our resources? When and where will we stop along the way to review where we have been and if we are still on schedule? To be successful, both ventures require planning and adjusting the plan according to change.

Follow the law. On my ride this summer, I was pulled over for going 40 mph in a 30 mph zone. I broke the law, though the forgiving police officer in Thermopolis, Wyoming, thankfully let me go with a warning.

Just as motorcycles are not exempt from the rules of the road, ERM also has to abide by applicable regulations and laws. Sarbanes-Oxley risk assessments, New York Stock exchange audit committees for risk management, rating agency requirements for risk evaluation, ISO 31000 ERM rules, and innumerable industry-specific regulations are all part of ensuring that you and your company adhere to the rules of the ERM road. Just as importantly, internal company bylaws and compliance rules for ERM must also be implemented and enforced.

Embrace (some) technology. Newer motorcycles are equipped with GPS trackers, enhanced anti-lock braking systems, Bluetooth connectivity, sensors for stability control and helmets with voice-activated command response. Similarly, technology advances for ERM can also assist and enrich the experience with dashboards that automatically populate as new assets, personnel or products are added, smartphone apps that deliver ERM data, and wearable technology for employee activity tracking.

While these advances are beyond valuable for both motorcycles and ERM, technology can also be a distraction. Always believing what our eye-catching spreadsheets tell us can be hypnotic, and new bells and whistles can distract you from watching the road, scanning the horizon for sharp turns, seeing stumbling blocks or cracks in your path, and being ready to adjust speed and braking. …

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