Skill Sets For A Successful Risk Management Career

by Ben Schull

What does it take to have a long and successful risk management career? Pamela Rogers, director of risk management for Sears, Roebuck and Co., and Tim East, manager of the risk management business process for The Walt Disney Co., discussed both the responsibilities and the necessary skill sets of risk managers at the 28^th Annual Risk and Insurance Management Society conference in San Francisco.

According to East and Rogers, risk managers should encourage management to think about risk before problems and claims occur. At Disney, East and his risk management team present a risk overview that outlines Disney's risk management philosophy to each business unit. The team also creates a risk vision and mission statement for each significant business unit. East urges risk managers to be visionary leaders for their companies, rather than merely waiting for claims to occur.

After a vision has been set, risk managers should work to lessen each business unit's level of risk by identifying each business unit's needs and creating ways to broaden and improve coverage. At the same time, risk managers must keep in mind that their ultimate goal should be to reduce costs. Finding ways to control costs by easing the organization's burden of administration and insurance will improve the risk manager's value to the company.

According to East, the ability to communicate is the most important risk management skill. Corporate risk managers should think of their companies' business units as clients to whom they provide risk management services. Because risk managers wear various hats, many people in the organization may be unaware of the risk manager's value. Risk managers should take the initiative by offering to present risk management overviews at business unit meetings. Educating company executives about the importance of effective risk management can hone risk managers' communication skills.

Risk managers must also be able to work with people at all levels of the company. It's important to remember that few people have absolute knowledge of their organization. Know who has the answers. For example, the chief financial officer is just one of many people who have information important to the risk manager. Risk managers must be able to find people with such information and communicate with them in a way they understand. Allowing these people to provide insight into business operations can be invaluable to the risk management team. A successful risk management career stems from understanding the value of colleagues and learning from their knowledge.

A well-rounded education is particularly important in understanding the diverse operating units of a company. In addition to having an undergraduate education in business, continuing a business education will strengthen knowledge in a breadth of issues. Risk managers need insurance knowledge, and a basic understanding of accounting and finance provides an edge that can make them vital and respected members of the organization. Many professional groups, such as FRM, ARM, and CPCU, can provide continuing education in insurance and risk management.

Risk managers must also have a keen analytical sense and work easily with numbers. Obviously risk managers must be comfortable with numbers and enjoy working with them, but according to East and Rogers, a true analytical sense is more important and appreciated by other financial officers. An MBA program that emphasizes analysis in economics, finance, and accounting is an excellent way to increase analytical skills.

As with any other professional career, organizational skills are important for risk managers. Prioritization is a crucial extension of organization, and risk managers must be able to juggle several projects at once. Successful risk managers find energy in the chaos around them and thrive on juggling responsibilities. Rogers suggests relying on a paper or electronic planner to stay organized and taking meeting notes that can double as a diary for review at the end of the quarter or year. Meeting notes allow the risk manager to take stock of goals achieved and reorganize priorities for the future.

Risk managers must have an appetite for knowledge and should continually ask questions to garner basic knowledge about all aspects of the company. Risk managers should seize every opportunity to learn, but at the same time must be generalists due to the volume of their responsibilities. Meeting and working with employees is an excellent way to learn. Risk managers should be willing to roll up their sleeves and hit the trenches. Venturing into the field to learn about the problems employees encounter increases the understanding of what really makes a business work. For example, Rogers travels with Sears service technicians to customers' homes to understand how their customer service really works. East agrees that learning through direct experience is often more valuable than being taught.

Another way risk managers can learn is by speaking with recruiters in the industry. Recruiters can be invaluable resources, because they know the skills and qualifications companies want in risk managers. Reading business and insurance publications and smaller risk management trade publications is the key to understanding the concerns and issues facing executives - they read these publications. Attend local Risk and Insurance Management Society (RIMS) chapters to network with people in the field.

Risk managers, like all other business professionals, should focus on professional growth to improve their skills and knowledge. Most importantly, risk managers should enjoy their work. Despite the inevitable obstacles and demands, a risk management career should be both enjoyable and stimulating. Because risk managers benefit every aspect of a company, they have the opportunity and responsibility to increase a company's growth, productivity, and profitability.