Risk Management

During my last two years at Washington Mutual Bank I worked in the Risk Management group heading up a program to reduce deposit fraud.  Fraud is fascinating and scary!  One of the keys to our success was balancing the bank’s sales and service goals with the changes we were implementing to make us a less attractive target.  It was a tricky balance that took a strong partnership across multiple business functions.  

Good risk management doesn’t equate to zero risk.  The best risk management functions embrace the business objectives and collaborate in designing strategies to support those objectives in a manner that minimizes or mitigates risk.

How are you doing as Chief Risk Officer of Your Life, Inc.?  Are you managing the balance between your objectives and risk or are you too risk averse?

People seem to fall into two categories:  those who define themselves by their successes and those who define themselves by their failures.  When we have a setback we tend to ask, what went wrong? When things don’t turn out as planned, we often stop whatever we’re trying to do and shy away from going down that road again – there’s just too much risk as evidenced by firsthand experience. 

But people who are pursing their dreams and have a track record of success will ask, what could I have done differently, what did I learn, and what role did I play in how things turned out?  They then take those learnings and either walk away or make adjustments to reduce the risk of repeating the setback.  Seth Godin wrote a great little book on deciding when to walk away called The Dip: A Little Book That Teaches You When to Quit (and When to Stick). 

So, CRO of Your Life, Inc., thinking back on 2010, what were your successes over the past year and what were your failures?  Draw a line and put success at one end and failure at the other and list them out.  I know failure seems like a strong word – think of it as things that didn’t turn out and things you walked away from - non-successes.  

Then look at the middle.  That’s where the goals not met often reside, the dreams not pursued, the abyss that creates a ho-hum life.  It might be the zone of work in progress, but it’s usually the zone of inaction or not enough action.  As the economy continues to create challenges, we don’t want failures so we forego creating success.  Things just sit in the middle until they die on the vine.

Now put on the CEO hat of Your Life, Inc. and think ahead.  What do you want in 2011?  Are you willing to dare to dream, take a risk and try for success knowing that a setback could occur?  Is your Chief Risk Officer on board collaborating to develop strategies that will support your objectives while appropriately managing the risk? Or is your CRO sabotaging your success?

I have a client who desperately wants a different life, but she is frozen in place by fear.  She’s afraid that she won’t be able to have what she really wants for her life and won’t even let herself dream.  She’s afraid she’ll get laid off and not have enough money to live, so she stays in a job she doesn’t like which is sapping her confidence.  This pile-up of fears combined with low self-esteem is so strong that she needs to feel safe and be comforted.  Guess what she does to comfort herself?  Shopping – resulting in credit card debt which is one of the factors feeding her fears keeping her penned into her current situation. 

Why do we do this to ourselves?  She’s not alone.  How many of us engage in self-sabotaging behaviors every day to help us feel safe and keep us on familiar ground?  We desperately want a different life but are unwilling to make foundational changes in thinking and actions that would create change and move us to where we want to go.  Our Chief Risk Officer (and Chief Financial Officer in my client’s case) need to get on board!

What about you?  Are you foregoing your own dreams by being unwilling to go for success?  By being unwilling to challenge and change the limiting beliefs and behaviors which keep you tied to your current situation?  Give me a call when you’re ready to have a talk with your Risk Mangement department and get them on board with supporting your dreams.