LCG was founded with a singular purpose; to transform how organizations work to the benefit of all stakeholders, but particularly for the primary value-creators in any organization, the employees.
In these tumultuous times, disconnections within both an organization’s hierarchy and with its external stakeholders have elevated the levels of risk and uncertainty to unacceptable and alarming levels. The resultant negative impact on the mission, employee engagement, effectiveness and value is becoming clearer for many organizations, and in many ways reflects the political events of our time. How we lead organizations must evolve, and a Risk Leadership Mindset is a new and effective way of doing so.
Risk Management is increasingly understood as a key multi-faceted discipline in effective organizations. It is usually practiced as a process that seeks to avoid or mitigate the impact of potential future negative events, even though it is also intended to also address the upside of risk. However, with some notable exceptions and despite positive intentions, it is often implemented inconsistently and not fully embraced as part of the organization’s culture.
A Risk Leadership Mindset goes beyond compliance with the myriad laws and regulations that govern organizations today or even the standard risk management behaviors that many still often struggle to attain. Instead, a Risk Leadership Mindset is one that builds the principles of effective Risk Management into all that we do, particularly decision-making and learning.
It promotes the attributes that allow organizations to take the right risks to improve the business, make the right decisions and continuously learn. As complexity increases and the speed of change accelerates, the level of risk increases, both in quantity and impact. Thus “ the rate of learning must be faster than the rate of change” (Dr. Yury Boshyk) and we should integrate that learning into effective, timely decision-making.
Truly effective Risk Management principles and processes, when executed consistently and combined with an engaged leadership approach, can create a Risk Leadership Mindset; good leadership practices can come from effective risk management, one energizing the other in a virtuous self-sustaining cycle.
So what does a Risk Leadership Mindset look like? The attributes that make up a Risk Leadership Mindset include:
Leaders who develop a Risk Leadership Mindset will be better able to help their organizations understand and work through a wide variety of challenges, dilemmas, problems and opportunities. They will make sense out of issues and problems that are multidimensional and connected. And they will be prepared to do what all great leaders do; help those they lead deal with increasing complexity and risks.
Imagine an organization that is aligned across the enterprise, with a culture that embraces and supports the inherent capacity and desire of people to perform valuable work in service of a wider community of stakeholders: this is what a true Risk Leadership Mindset can create.
Author : Alasdair PHILIP, Managing Partner at the Loyd Consulting Group BV.
For more on the subject please contact the author.
1 From the work of Reinventing Strategy by Willie J Pietersen, John Wiley & Sons, 2002
3 Yury Boshyk, ‘ACCELERATING GLOBAL GROWTH, INNOVATION AND LEADER DEVELOPMENT THROUGH BUSINESS DRIVEN ACTION LEARNING: What is it and how is it being used today in global companies?’ in Mike Pedler, ed. (2012). Action Learning in Practice. 4th edition. Aldershot, U.K.: Gower, pp. 81-91
4 Learning Styles Questionnaire: Alan Mumford and Peter Honey, 2000
5 Jay Greenspan, Founder and former chairman, JMJ Associates
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