Beginning a Career in Risk Management
I started my career in risk management through a project involving a mega-infrastructure company. The problem was, I am not even an engineer or an accountant. Not even in business management. I am a mass communication graduate. It was my first full-time office job after returning from Japan. My first question was, is this for me? I decided to give it a try because it was a rare opportunity.
The biggest challenge in the beginning naturally was learning curve. The difficult terms in risk management and the base concept. Then I was bombarded with all the engineering terms. The client built a RM5 billion infrastructure and so there are two areas they dealt a lot with. Complex engineering and complex financing. I survived by following through an iterative process my boss designed for me. I worked till almost midnight every day for two years.
Along the way I realized that concepts can be learned but convincing people and changing mindset was another level altogether. Client employees had the perception that their role in risk management is simple, that is to submit forms and checklists to the risk management team. After that, it is none of their business. It was challenging to convince them that they actually play a significant role in solving risks. Mitigating risks is not just about putting controls in place. Some risks, like market acceptance of a product, requires innovation and collaboration.
It was tough communicating with them on the value of risk management because I needed information, action and cooperation from them to allow me to perform my job. I also needed to understand the business thoroughly, from its external factors to internal operations. An eye for detail is necessary as I needed to analyse various documents that are totally unfamiliar. I had to detect risks and constantly communicate with people across all levels including the C-level executives. I had to plan and draft all the questions carefully beforehand.
It all seemed like a lot but when you are guided with a clear iterative process, when big tasks that seem overwhelming is sliced into small simple tasks, all that matter is patience to succeed.
How to Learn Complex Risk Management Theories
I initially faced difficulty in understanding some risk management concepts. The top 5 hardest concepts to learn was:
Establishing the context - I cannot comprehend what a ‘context’ is.
Risk appetite - ‘appetite’ is subjective and I thought it was impossible to measure them.
Risk tolerance – not easy to differentiate with appetite.
Causality – this word is totally alien to me.
Measuring risks – ‘risk’ is already a fuzzy word and now I have to measure them?
I applied two methods to acquire the concepts. One of the methods is visualizing it. By drawing flow charts and diagrams, I can see a pattern much more easily than words and numbers. As half of our brain is dedicated to vision processing, pictures are easier for our brains to comprehend than words. Additionally, we often lose focus in lengthy words. Diagrams instead convey more information in less time. Another method I applied was to relate it to something that is familiar and rephrase it into simple English.
I managed to understand the concepts and the connections between them. Understanding principles is crucial to our job performance. Once I understood them, I was able to design and draw forms logically and these forms were used by our clients to carry out their risk management processes. They even become a publication for government to apply risk-based approach to regulatory enforcement and inspection. Iterative tools simplify complex works.
Attributes to be a Risk Manager
I am often asked what makes a good risk manager. I think the attributes that make a good risk manager are:
curiosity and research skills
attention to detail
clear, simple and friendly communication
ability to present complex information in a simplified form
calmness and poise while under pressure
genuine interests in resolving problems and seize opportunities
self-education in science
inspiring and positive attitude
determined to make changes
If you possess these attributes, you might want to explore the possibility of becoming a risk manager. Risk management can be an interesting career particularly when you learn how it facilitates decision making. It allows the organization to see the big picture, then trickle their vision into tasks carried out by individuals. You get to know things are related and how an external event could impact an organization in which exact process area. You learn to measure problems in dollar value. Risk management helps leader justify their dollar decision. Most companies don’t measure the cost of their decisions.
From my experience, organizations that apply risk management will benefit from timely information provided by the risk management function. Risk management encourages constant monitoring on the organization’s external environment to look out for risk events. Risk manager escalate risk issues up the chain of command as risks emerge and if necessary, break through rigid governance mechanisms to get the right talent/skill to address critical risks. Moreover, risk management helps leaders to make informed and justifiable decisions.
In a fast-changing world, leaders must think about how they can respond to a rapidly evolving environment. I see risk management needing to be more sophisticated in order to cope with evolving risks. For organizations to sail through them, the need dedicated tools and talent.
People may be uncomfortable to move away from their comfort zones. There will be many voices and obstructions. Risk managers should always fall back on their change-agent role and should not be afraid to embrace dialogues and contradicting opinions. Exchanging opinions are genuine efforts to achieve consensus and understanding.
Critical thinking is absolute necessity. Risk managers must constantly challenge the process and ask questions to find out why they are designed that way and the implications to the organization.
What are the paper qualifications needed to become a risk manager? While there is no formal qualification for risk managers, you are more likely to succeed the role with an educational background in maths, science, engineering or economics degree. Accounting and finance would help. After that, it is down to attitude. Anyone can develop a positive attitude. Therefore, anyone can succeed in risk management with the right attitude.
A career in Risk Management is tough initially but rewarding, especially in developing visions and knowledge.