“gRc”: Moving Beyond Governance and Compliance to the Commitment of RiskAddressment^TM

Mary Beth Borgwing and Pamela Brill, Co-Founders, RiskAddressment ^TM

RISK management – is the new change management.

Both are mindsets that are critical to an organization’s success and longevity. When risk management is viewed as a mindset, commitment replaces compliance. People throughout the organization start to engage and identify positively with risk-taking. Risk-taking as a new mindset can generate profits and bring innovation back into the company and overcome the notion that risk-taking impedes company’s profits and its competitive edge.

When risk is embraced and embedded as the cultural mindset of commitment, it can move the needle on growth and generate short-term wins and long-term sustainability.   We see this in the technology sector over many years in companies such as: Apple, Facebook, Intel, RSA and Google in an industry that embraces risk and innovation equally.

We compare the technology sector where headlines talk mostly of innovation and risk to the financial services and the oil industry where headlines are not about innovation; but smeared with scandals, rouge traders, hedging gone wild all with a constant theme of denial and lying.  The industries top dogs such as; Barclays, JPMC, Lehman Brothers, MF Global and BP hid behind their mistakes using Big “G” and “C” (“GrC”) forgetting to look at RISK. Their focus was confined to compliance and keeping regulators at bay.  Leadership in these companies responsible for risk forgot and ignored that RISKS lie beyond being compliant with regulators.  

But risk is not so easily confined. Regulation and compliance mandates should be understood and embraced by everyone within an organization.  Thinking of risk like “change management” will lead us to the same Greek chorus that we have heard for decades “manage change” and there will be an uptick in profits. However, it is well known that only a measly 20 to 30% of changes are implemented. What will that do for an organization?   Should we treat “RISK” like we have “Change Management”? It is time to move risk from management to a proactive organization wide system to identify; harness, and address risk and get into the “risk zone” of RiskAddressment^TM 1-2-3.  

Organizations need to take Strategic Risk to grow and compete. When the rules of compliance and governance lie over companies like a “wet blanket” sticking to the fabric of the culture, these rules can become the very risk that blindsides leaders! The rules and risk management procedures themselves can create a false “comfort zone” – a sense that their organizations have identified all risks that are preventable as well as the risks that are strategic for growth, profit as well as external risks that arise that are beyond their control.

Much has been written about JPMorgan Chase’s Jamie Dimon being the “ultimate chief risk officer of the bank” with ownership of GRC at the top. However, the bank seemed to still be focused on Governance and Compliance and not modeling the true RISK?  Instead of the bank’s leadership creating a culture where there were open discussions on risk they paid “lip service” to little “g” big “R” and little “c” “gRc”.  The bank stuck its head in the sand and only looked to quantitative risk modeling, metrics and measurements.  If they had developed a risk culture using “risk intelligence” (IQ) and “emotional intelligence” (EQ) where would the whale trade be today?  For risk management to be effective, there must be a risk culture developed to support a risk framework with metrics, models and governance as well as commitment and compliance – “weaving together Risk IQ from modeling and metrics with your employees Risk EQ – using their emotional intelligence on risks – this is real RISKADDRESSMENT. ^TM

To be Risk Smart, a company must be able to talk about risks and the preparations required to face risk if the worst should occur. Building a risk environment where the company culture understands the 3 faces of risk: Strategic Risk, Preventable Risk and External Risks are the only method to enable employees to move beyond the natural fear of risk. Opening up the company culture to accept risk dialogs creates risk awareness and everyone can move forward “eyes WIDE open” never to be BLINDSIDED by Risk.

HBS’s article on JP Morgan’s Loss: Bigger than “Risk Management” quotes Gentry Lee, chief systems engineer at NASA’s Jet Propulsion Laboratory: ”Risk mitigation is painful; not a natural event of humans to perform.” 

We believe if employees are recognized for straight talk about risk and for being ready and wiling to speak of risk and act on it and that their management objectives align with corporate strategy, you can change behavior and build a risk aware culture.

RISKADDRESSMENT ^TM   Authors:

Mary Beth Borgwing                                        

Email: mbborgwing@riskaddressment.com; Twitter: @riskaddressment

Mary Beth Borgwing is a finance and technology savvy senior executive with general management, strategy, finance, technology and operations experience in financial services, global insurance, healthcare, manufacturing and small business market segments. She has extensive start-up and turn around experience with a strong track record for problem solving, profit and market share improvement, speedy results and team building.

Mary Beth is founding member of Standish Risk Management, a consulting firm and developed RiskAddressment ^TM a proprietary methodology using neuroscience along with behavioral science in conjunction with enterprise risk assessment tools to assess and create cultures of risk awareness.  The firm currently works with teams and companies in high growth sectors, financial services, and Fortune 500.

Her prior work experience includes Chief Financial Officer and Treasurer Sentillion (MFST: US), an IT Security Healthcare company for single sign on software. She also served as EVP at Arthur J Gallagher (AJG), SVP at Willis Group Holdings (WSH) and VP at Marsh (MMC) where she managed client risk strategy and business development in Boston and New York City. Before Sentillion, she held a number of senior positions in financial management performing turnarounds, starting up corporate divisions and advising high growth technology companies.

She is a member of Security Innovation Network as well as a past Board Member of NYMISSA (Information Security Society Association), Financial Executive Institute and the Forsyth Institute for Biomedical Research. Ms. Borgwing has been a frequent speaker on financial management topics in various venues such as American Conference Institute, American Bar Association, Digital Nibbles, Milken Institute, Women Corporate Directors, BIO CEO Institute, MIT Sloan School Speaker Series BIO and other Industry Conferences.

Dr. Pamela Brill

Email: pmbrill@riskaddressment.com; Twitter: @riskaddressment.com

A respected expert on assessing, addressing, and readying for facing risk, competition, the challenges of implementing strategy and of performing under pressure, Dr. Pamela Brill is the founder and inventor of the In The Zone methods and the author of the “The Winner’s Way”, a proven method for achieving your personal best. Dr. Brill’s clients and followers are the leaders who perform at the top from Fortune 500 CEO’s and political leaders and elected officials on Capital Hill to nationally ranked sports teams and surgical room operating teams in the heat of competing for patients’ lives. The Winner's Way has proven effective for clients facing challenges from the ordinary to the extremes that can blindside any one of us—life-threatening accidents and viruses, black swan events brought on by marketplace and natural disasters.

Dr. Brill has served in senior leadership and consultant roles with strategy and leadership development organizations including The Tom Peters Company as Principal and working directly for Tom Peters on organizational strategy, Computer Sciences Corporation as Director and Head of The Center for Leadership and Talent Development for The Americas and Consulting, BAE Systems as Confidential Advisor to the Senior Countermeasures Lead and Team, global leadership development firm Linkage, Inc. as Senior VP of Learning Solutions and Head of the Executive Coaching Practice, and Dartmouth Medical School and Medical Center as a faculty member in the Department of Psychiatry and Clinical Psychologist. Leadership and organizational excellence gurus, Tom Peters and Marshall Goldsmith, with whom she has worked shoulder-to-shoulder in apprentice-like roles, have mentored brill. Brill has served on the Board of a bipartisan political organization and as a Director on the Board of the SURDNA Foundation accountable for strategically gifting $40M a year to not-for-profit organizations, and provides pro bono programs for community agencies.

Dr. Brill is the published author of hundreds of articles and of 3 books: The Winner’s Way: A Proven Method for Achieving Your Personal Best in Any Situation (McGraw-Hill, 2004, Kindleized by Amazon, published in China and India, and in audio); No Winner Ever Got There Without a Coach –A Guide to Personal and Professional Success, coauthored with David Rock, founder of The Neuroleadership Institute, and other contributors (Insight Publishing, 2012); and Coaching for Success, coauthored with Rock, and Rudy Rudtigger, famed “Rudy” of Notre Dame Football and the movie “Rudy!” (Insight Publishing, 2009). Brill’s commentary has been featured in Investor’s Business Daily, Entrepreneur, Harvard Business School Press publications, The New York Times, Chicago Tribune, Washington Post, Men’s Health and Runner’s World magazines.

Described as both educational and inspirational, Brill has presented Winner’s Way programs in keynote and executive education programs including Wharton, Babson, and Whittemore Business Schools; Smith College Executive Education for Women; US Olympic Committee; Offices of the US Senate; Genzyme; Fidelity; and State Street Bank. An avid athlete, Brill walks the talk of living ‘in the zone’ running and working out daily to maintain longevity and stave off risks in real life.