It never stops amazing me how common risk management ideas like “don’t use averages to plan”, “uncertainty affects decisions”, “assumptions need to checked”, “cognitive biases affect how people see risks”, “it’s not the risk that is important but it’s effect on objectives”, “risks are distributions with both positive and negative effects”, “some qualitative risk methodologies guarantee bad decisions” are not common at all.
Risk management is still not common knowledge. Maybe one day it will be a prerequisite first year subject at uni, but not yet.
Many stakeholders risk managers deal with on a daily basis were either never educated in understanding risks and how to deal with them or have forgotten since the uni days. Stakeholders need to be trained in assessing risks and making decisions under uncertainty. Risk management awareness, risk management games, storytelling, training and development is something my team has been doing for a long time, so I though I share some of the interesting ideas.
Integrating risk modules into existing leadership programs
Strong first line is fundamental to effective risk management implementation and risk based decision making. The most positive impact I had from training when it was blended into existing training programs, for example as a risk management module inside the leadership development program.
A module that covers what is risk, why people often ignore risks when planning and making decisions and simple techniques to include risks back into the decision making process.
I found it best when the risk management module is linked to the decision making, strategic planning and budgeting modules and the messages are consistent across the program. It’s a challenge, because speakers are often external and different, yet the pay off is great. We did both in-person and virtual format but I find in-person works better.
Book a quick free chat to find out how my team can help with designing or running risk modules for your next leadership program https://meet.sendinblue.com/risk-academy or send me a message Contact Alex Sidorenko.
Quantitative risk analysis training for risk teams
I think it is now inevitable that risk teams wishing to provide better value and integration into planning, budgeting and performance management processes will sooner or later require to upgrade their quantitative risk analysis competencies.
We have designed and delivered numerous quant risk management programs designed for various levels of risk analysis:
- basic level – training for teams that are still doing RM1 but want to dip their toe into the world of quantitative risk analysis and usually start by converting their risk registers into loss exceedance curves, calculate expected losses, unexpected losses or cVaR or automating risk analysis using Archer Insight
- standardised – training for teams wishing to deep dive into important risks using bow ties or decision trees and improve on their quantitative risk estimates
- advanced – training for teams with significant quantitative background who want to learn how to build tailor made models for important decisions, for example building insurance fair value models or models for environmental risks.
Risk awareness training for auditors, finance, insurance, strategy departments
Having a strong second line is critical for effective risk management implementation. We have provided numerous risk awareness courses for the second line departments to strengthen their risk management competencies and highlight points of integration:
- for the strategy team training can cover assumptions checks and replacing scenarios with risk based simulations
- for internal auditors training can cover how to prepare risk-based audit plans, how to identify risks within a specific audit review, how to audit risk management effectiveness and how to make audit findings risk based
- for insurance team training can cover estimating the insurable risk profile, calculating the fair value of insurance at various deductibles, selecting a risk adjusted deductible level and comparing policies.
Risk awareness sessions for Boards and executives
Companies often engage me to do concise risk awareness sessions for Boards, executives and Audit Committee members. Such trainings usually cover research findings into business decision making and the effect biases have on risk perception, the role risk management plays in improving the quality of planning, performance management and investment decision making, the role Board members play in reinforcing the risk culture and many other important messages you wish your execs knew.
Risk management games for students
Over the years we have designed few in person and virtual games lecturers use to teach risk management concepts to their students or risk teams use to upskill personnel. I have written a separate article on gamification in risk management or you can purchase the games from this website Risk Modelling Game 3.0