It must be just me, but every time there’s a need to present a complex topic to the executives or business leadership (topic for another musing, methinks) I get the typical looks of “oh no, he’s going to get all lectury again”. And it’s true, I prefer to present complex topics as complex, even if the style of presentation makes them approachable. There’s no way to dumb down something that’s complex without:
- also sending the message that sure, they may be leaders of the organisation, people that we entrust to make the right decisions, but hey, let’s not try to present them something that’s not so simple that a 5th grader could solve or they’re end up in foetal position on the floor begging to make it go away;
- quite decidedly making the whole organisation poorer for the experience and less equipped to make the right calls because we, the experts, decided that only we should hold the knowledge; and
- actually making ourselves poorer for the experience, because when we start dumbing down, as opposed to making approachable, complex topics we also deny ourselves the opportunity to challenge our own knowledge of the topic.
And so it happened with risk appetite statements. Risk appetite is a topic near and dear to my heart, mostly because it’s not the easiest thing about risk to understand and get right, but also because it says “hey, it’s OK to take risks! Matter of fact, if you don’t take risks you don’t live”.
Helping the decision makers take informed risks is what risk managers are all about. (Tracking risks, writing them down, reporting on them, moving dots on the heatmap - all that is risk administration and better left for business analysts or someone of that calling to do). Back to risk appetite. It is a complex topic. Not complicated, not convoluted, just complex. And yet with a right approach you can make it simple to understand and easy to use if you only want. And herein lies the problem - a number of my risk peers don’t want to put in the effort to understand the subject, preferring to either dumb it down or repeat the empty-sounding cliches.Tags: risk, risk appetite, risk management, Risks