Magazine article Risk Management

Career Update: Staying Ahead of the Curve

Magazine article Risk Management

Career Update: Staying Ahead of the Curve

Article excerpt

In my role as an executive recruiter, the question I am asked most frequently is: "What do corporations look for when filling a risk management position?" I've given the same answer for 10 years: one, an excellent communicator; two, someone who thinks like a business person; and three, an individual who is technically competent.

This wasn't always the case, however. A generation ago companies hired their insurance managers primarily for their technical abilities. They were specialists hired to buffer top management from the enigmatic world of insurance. But by doing the job so well, by adapting to the changes taking place in the industry-the customizing, simplifying and broadening of coverage, unbundling of services and new products-and reducing the overall cost of risk, these risk managers changed the terrain and successfully demystified risk management. Where does this leave today's risk professional?

What Companies Want

When filling a risk management position, I start by reviewing the client's perceptions: where risk management fits in, where it has been less than effective and how the new risk manager can add long-term value. Whether directly articulated or not, there is usually a real desire to bring in a risk professional who can be seen as a "mainstream" manager.

Most executives don't discuss the latest ISO forms or compare elegantly manuscripted policies with their peers. They may benchmark the overall cost of risk but they don't often appreciate the minutiae and nuance of the craft. They do, however, judge general management skills; how the risk manager relates to other staff, operations managers and peer senior executives; how he or she develops talent within the department and manages their tools and vendors: in short, the soft skills are now the more likely key to success.

Building Blocks

This doesn't mean that you don't need a grounding in the fundamentals. Football coaching legend Vince Lombardi once declared that success was directly tied to "mastery of the basics" and that execution of blocking and tackling was the foundation of a championship team.

In much the same manner, success as a risk manager is largely tied to seamless execution of the fundamentals. Safety and loss control and their corollary, claims management, still drive the cost of most programs.

But when these basics are communicated effectively throughout the organization you'll usually find a risk professional who is networked through all the formal and informal corporate and operations channels. Claim reporting and feedback procedures, scheduling and scope of safety and loss control visits and a clear communication of cost allocation concepts all contribute to the risk manager's reputation in the field.

More and more organizations have spun off many of the critical competencies to operations and human resources management. Much of this co-opting is a function of relative staffing levels or the desire of management to put responsibility closer to the front lines. Often as not, however, it signifies a deficiency in risk management's ability or willingness to service the organization's needs. The risk manager who allows responsibility to be delegated, without scrupulous monitoring, measuring and follow-up, does so at great peril.

Knowing Your Limitations

There is a fashionable theory that posits: Because risk managers are typically ensconced in the finance department, their time is better spent dealing with the "big picture" stuff; that is, "risk is risk" and it all ought to be in the same bucket. …

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