Some people — managers and business owners included — are just better at managing risk. Maybe it has something to do with personality or natural ability, maybe it has something to do with a more developed skill set or greater understanding of the risk management process — most likely, it's a little of both.
Management consulting firm Accenture explored what makes a business owner or manager truly effective at handling risk and identified several common traits among top performers.
Top-performing owners and managers
- Rely more on their chief risk officers (CROs) for guidance and advice when developing and maintaining risk management programs and activities; see Risk Management and Insurance Overview.
- Are more involved with their boards of directors in discussing potential risks and responses.
- Focus more on emerging and strategic risks rather than only day-to-day issues.
- Lead in the use of analytics to inform decisions and responses.
- Excel at recruiting, retaining, and training employees.
- Face fewer obstacles around board buy-in, employee skill gaps, and budgets.
Some of these factors are advantages that not all businesses enjoy. For example, many managers encounter budget constraints when investing in risk management resources.
Other factors are people and process skills that can be developed. Improving board engagement can start with simple, sincere gestures that show appreciation for members' time, such as a phone call or a thank-you note.
Hiring well and retaining good employees are learnable skills, too. Training, clearer job expectations, and regular feedback help build a stronger team, and managers can find practical guidance geared to agency leadership at Agency Manager Vision Series Insurance.
Ultimately, the most effective managers combine strategic attention to new risks, strong people skills, and the right analytical tools to respond quickly when new threats emerge.
Frequently Asked Questions
What does a chief risk officer (CRO) do?
A CRO identifies, assesses, and advises on risks across the organization and helps design programs to monitor and mitigate those risks.
How can a small business improve board buy-in for risk programs?
Present clear, concise risk assessments tied to business objectives, show projected outcomes, and recognize board members' contributions to encourage ongoing support.
What are emerging risks?
Emerging risks are new or evolving threats that may affect strategy or operations, such as technological change, supply-chain disruption, or regulatory shifts.