Risk Management is good, so the more risk management, the better, right?
The key to effective risk management is to use it intelligently, with the understanding that risk is inherent in everything we do. There can be no opportunity without risk. We have all experienced how ridiculous and frustrating it can be when faced with too much risk management.
This example might sound familiar to some:
A not so long time ago, in a an organization not too far away, a manager needed to make a day trip from Victoria to Vancouver to meet with his client’s board of directors. The corporation was paying all travel costs – about $300 for the day. The manager, however, couldn’t schedule the meeting until the proper approval was obtained, so he dutifully drafted an email to his Director providing the required information and requesting the necessary authority.
- The Director reviewed, approved, and forwarded it to the Executive Director.
- The Executive Director reviewed, approved, and forwarded it to the Vice President.
- The Vice President reviewed, approved, and, not a word of a lie, forwarded it to the CEO!
- The CEO reviewed the request, approved it, and started the process again, this time in reverse.
The unidentified manager remembers thinking at the time, “Wow, surely the CEO has better things to do with his time than approve minor travel expense claims for little ol’ me…”
What was the cost of this level of control, in an effort to reduce potential employee fraud? On the surface, just the time and effort required of multiple talented and hard-working managers and executives.
But that’s not the whole story. Morale suffered, as employees felt powerless. (How must that VP feel, denied the authority to approve a $300 minor travel expense?) Productivity suffered as people assumed meeting clients was more trouble than it was worth. Most importantly, innovation and motivation suffered. If no one in the organization can make a decision about going to a meeting without the CEO’s approval, how could they possibly make a recommendation about whether a client should make a multi-billion dollar development decision?
At Enlightened Business Risk Solutions, we realize that risk management, like most things, is good in moderation, and we have the experience and perspective to help you put appropriate, affordable risk controls in place to help you achieve your Mission, Goals and Objectives.
Want to know more? I’d love to hear from you. If you have questions, comments or want to geek out about risk management, contact me: