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If I’ve learned one thing in all the years that I’ve studied the commercial insurance industry and the risk management profession, it’s that relationships matter.

The phrase “insurance is a people business” has always been true, and that saying applies to the risk management industry, too. Numbers and data analytics are more prevalent today in the daily lives of risk managers, their risk advisors and underwriters, yet none of that matters unless it informs and influences the actions of people.

Risk managers need allies to help them do their jobs thoroughly. One person can make a difference – whether in a community or a global corporation – but when allied with others who support and magnify a common vision, that person can make a much bigger difference. More than ever, risk practitioners need to build strong alliances.

Where should risk managers start in seeking allies? The C-suite is often cited as a vital place for any manager to have support. Obtaining the support of an organization’s decision makers is always important. A  Harvard Business Review article in January 2015 on “Getting the Boss to Buy In” discusses seven tactics that help middle managers to win senior management support. For risk managers, who often occupy those middle management ranks, these are insightful.

Studies show that most risk management professionals report to the chief financial officer or treasurer, while a smaller but significant percentage report to the general counsel. Having the ear of your CEO, CFO, general counsel or other C-level executives will provide a strong foundation for challenging and changing the status quo in an organization. Solid relationships with senior management don’t happen by accident. They require a combination of technical know-how, understanding of the business, an ability to discuss risk in contexts that senior executives understand and a willingness to raise opposing viewpoints.

Knowledge of and the ability to speak the language of finance is a big advantage for risk managers.  A highly successful risk manager I know once told me, “I always try to explain our risk management programs in terms my CFO lives by. That’s why I strive to express our impact in pennies per share. Improving our company’s performance by even one penny per share translates into a big number.” Risk managers can get a lot of support for this kind of message from their brokers, risk advisors and underwriters, too.

Another level, which I’d say is equally important for risk managers to build alliances on, is the level of line managers. There often is a gap between those at the top of the organization and those who run its operations and interact with customers and suppliers every day. It’s the nature of how organizations run. Somebody has to pay attention to the everyday, while leaders have to see longer-term, strategic things and make financial decisions about the future. Neither group is less (or more) important; both are doing critical jobs. Risk managers therefore should build relationships among both groups.

A relatively new C-level function in large enterprises is the chief sustainability officer. A  Forbes article notes that CSOs often start with environmental concerns such as their companies’ use of resources and impact on the environment, and evolve to broader strategic things such as supply chain conditions and innovation. That sounds a lot like it overlaps with other C-level roles, not least that of the chief risk officer. What is risk management, after all, if not to help support and sustain operations? Unexpected and uncovered loss is a major monkey wrench in any organization. Good risk management and risk financing are effective ways to keep the engine humming. An executive who is devoted to analyzing and leading efforts to keep an organization going and growing is not a threat to risk managers, however. That person can be a powerful collaborator for corporate risk professionals – provided that they see each other as valuable contributors to the organization’s success.

Alliances take time and effort to build, but the benefits that come from them are many. When risk managers are visible, heard and supported, they help organizations tame downside risk, achieve business objectives and sustain success.

Regis CocciaRegis Coccia is an insurance journalist and content strategist. His columns on insurance and risk topics appear periodically on Fast Fast Forward.

The views expressed in this column are the opinions of the author and do not necessarily reflect the opinions of XL Catlin.

 

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