Getting you risk ducks in a row

As we live in an increasingly risky environment, CEOs are having restless nights worrying about what tomorrow may bring.

While this has always been the case, we have gone through more disruption in the past two years then we have in recent history. Political and economic changes are affecting the financial services industry which itself is facing additional challenges of its own.

The rules of the game

Navigating this risk can at times be tricky, and may be an issue that keeps CEOs awake at night. This was the topic of discussion at a session held at the end of 2017 by the Institute of Risk Management South Africa (IRMSA) Conference.

Miles Crisp, CEO of Tarsus Technology Group, said that in his time as CEO of various companies, he encountered the same issues that are a worry to others who held a similar position than him in other companies.

“The common issues that companies face are regulation, skills shortages, disruptive technologies and business models, the ability of their companies to compete on in the global environment and the company’s reputation. However, these are not risks in my opinion. These are everyday issues and need to be seen as the rules of the game,” said Crisp

The starting line up

Crisp went on to add that companies who are able to master the rules of the game better will prove to be profitable in an environment that is increasingly becoming risk driven. “The true risks that is keeping CEOs up at night, in my opinion, are fears that the company does not understand the rules of the game and cannot master them,” said Crisp.

In order to achieve this, Crisp pointed out that companies need to change the language within their organisations.

It is also about the company’s approach to business. Crisp pointed out that many problems that companies face has a lot to do with inflexibility and dealing with egos within a company.

“There was recently a situation in our company where we submitted a tender for a government contract. While we were in the process of submitting the documents, the two staff members who were working on the documents went pale in the face and were experiencing high levels of stress because they thought the tender was worth R100 million. When the top management looked into the tender, we discovered that this was not the case as it was significantly less than R100 million. The manager of the two workers told them it was worth that much because she didn’t trust them enough to complete the task if there wasn’t a lot on the line,” said Crisp.

How often is this an issue within companies? How many CEOs have to deal with staff members rowing their own boats within organisational silos because they do not trust the person next to them?

Moving forward

So how do companies move forward from this? Once a company has identified the risks that they face, they can control the language so that they can move forward to addressing the risk.

“Key to this is coming to terms with the fact that there is no blanket offering when addressing risks. Systems that address risk need to be fit for purpose and flexible. They need to be established early and need to be ingrained into the culture of the company. If this does not take place, then the company will fail,” said Crisp.

When it comes to addressing the skills shortage issue, Crip said that companies need to look at how they are hiring and where they are hiring from.

This is especially pertinent in specialist industries such as insurance. The pool for specialised skills is small and most of the professionals with these skills know each other. “When it comes to specialised skills, insurers often use professional recruitment companies who have these professionals on their books. Therefore, the same skills get churned and shifted around the industry. Is this not creating a bigger problem?” asked Crisp.

Editor’s Thoughts:
Risks are personal to each company; Crisp’s viewpoint that flexibility is important when dealing with risk then becomes important. However, what strategies do companies use when dealing with more than one risk at a time that requires the same level of attention? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.