Don’t blame them – they are not the problem

I recently had one of the most cathartic conversations of my career. It was with a senior internal advisor who is now in audit but has held all kinds of roles in the organisation so he gets what support functions do, why they do it and, much to his chagrin, how they do it.

The organisation in question is doing something that many organisations do, changing from A to B after they changed from B to A say five years ago after changing five years before from A to B, you get the picture. In this case it is de-centralising support functions as opposed to the shared services approach. I know, I know, you are heading down the shared services route right? Yep, but in five years’ time you will most likely be turning it around again. However, that is not the purpose of this rant and will be saved for another day.

At any rate, the internal advisor was commenting on how the business was starting to realise that while their corporate overhead cost was coming down, someone still had to do the work. He said they were needing to face their own internal biases about support functions being time wasters and/or overly restrictive and really come to terms with their purpose. Then came the cathartic moment.

He said that he was talking to a division head who told him heads of risk were to be put in each division. He asked, “What for?” The answer was, “To provide information to the board on the risks in the business. Board reporting.”

OMG! There is no wonder that executives in the business don’t get it. They are being told it is all about someone else, the board in this case. No mention about helping them run a successful business, to help them manage the uncertainty we all face in this increasingly fast changing world.

The sooner all the heads of support functions understand that their objective should not be to implement their function and that it should be to support the business to be successful, the sooner everyone who works for them can stop being so frustrated, feeling unappreciated and downright avoided by the business. The sooner they can get on with providing advice that has real impact that helps achieve the success the business is seeking.

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Comment by Bryan Whitefield on July 22, 2016 at 3:13am

Robert - nice comments about attitude - here is a linkedin post I put out this week called Match Employees to Risk Appetite.

If that link does not work, here is the another to try Match Employees to Risk Appetite

Comment by Bryan Whitefield on July 22, 2016 at 3:10am

Thanks for everyone's comments.  Nice when a rant gets some more rants.

Here in Australia, because of a push by the regulator of the finance sector (which was picked up by the large audit firms and run with, with cash falling out of their pockets because of the speed) for the Three Lines of Defence (3LoD) model, this notion of having  risk in the business running a defensive line has put the industry back years.  Frustrating, hence my rant.

Comment by Jonathon on July 18, 2016 at 4:33am

Sounds like a box being ticked again Bryan.

Thanks for the rant, reminds me why we need to keep the fire burning as people still don't get it!!

Comment by Bill Knegendorf on July 18, 2016 at 2:12am

If the functional head doesn't understand the risk within their functionality well enough to discuss it with the board, how about re-evaluating the quality of that resource instead of adding another layer of costly information transmitters.

Comment by C.CHANDRASEKHAR on July 15, 2016 at 7:46pm

Risk is integral to every business function - the functional heads need to be trained to analyse risk in every decision they take. There is really no point to provide  specialized post of a risk manager in each department which would not only add to cost, but would also complicate decision making process. Risk Management as a separate function is needed

only in specialize / technical areas such as foreign exchange and treasury - it is also required at organisational level to measure operational risks - but not 'a risk management' cell for each function, such as procurement or sales.    - C. chandrasekhar

Comment by Robert Arvanitis on July 15, 2016 at 5:11pm

True, but...  (Isn't that always the case?)

Those divisional risk managers must have the proper attitude.

The naïve view is to avoid risk.  But you propose s a far more proactive and constructive role.

The true purpose of risk management is to take risk and GET PAID for it.

Alas, those who find themselves in risk lack that entrepreneurial drive.

Comment by Glenn Melcher on July 15, 2016 at 5:04pm
Often times the daily grind is something that is so far removed from where policies are implemented that when a solution is determined to be viable, it's not... It's simply dead on arrival..

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