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Risk Management

Risk leadership in times of uncertainty

Posted by on 15 November 2022
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How can risk leaders step up to the “people challenge” and guide the business in building a sustainable environment for their employees in a volatile time such as this?

In the past few years the pace of change has accelerated in almost every aspect of our personal and professional lives. Economic, social, technological, political, and environmental uncertainties have also had a profound impact on people’s psychology, affecting their physical and mental health and their ability to cope with change. These changes have together created a climate of uncertainty that now must be dealt with at a personal, team and organisational level.

The key for leaders faced with this challenge is to create a supportive and sustainable environment in which others can thrive during uncertainty. This starts by more deeply understanding each person’s unique needs and their ability to adapt and change as the environment is also changing.

In practical terms, this calls for a leadership style that “humanises business and puts people first” according to Flux trends. This means leaders need to be kinder and more empathetic with the people they lead, providing context, support and coaching as the environment evolves. The leaders who manage to navigate this new environment successfully will give their organisations a competitive advantage, but the question is, how can leaders actually step up to this challenge?

It starts with us. Risk leaders need to lead themselves first by connecting the dots and understanding the bigger picture. They need to be able to “spend more time on the balcony instead of the dance floor”, to gain a wider perspective of what is happening with and around them and by extension the people they lead. In other words, they need to build their own physical and mental wellness before they can help anyone else.

This includes taking care of themselves - spiritually, mentally, physically and emotionally, and being cognisant that their behavior will ripple down into their teams behavior as well.

We can view this as a compass in which leaders need to have an ability to lead from all sides - from the front, side and even from behind in some cases. This contextual leadership then allows their next level team leaders to lead in their own areas of expertise, allowing them to make decisions with greater freedom where the actual work is done. This will not only empower employees to improve their productivity, but also build trust, which is at the centre of all good leadership.

The hierarchy also needs to be flipped so that people can contribute meaningfully by more autonomously deploying their skills, knowledge, and experience. In this way, leaders can “let go” and in so doing create more leaders who are themselves competent and can deliver the same value or even more than they would have previously with more direct intervention from the manager.

Now is also the time for leaders to capitalise on the strengths of their teams. By finding ways to link the daily work with people’s natural abilities and passions, leaders can create a working environment that is enabling and fun despite uncertainty. But to do this leaders also need to be authentic and allow themselves to be vulnerable - they don’t have to know it all and act as if they have it all figured out - it is ok to ask for input from their teams.

For effective leadership during these volatile times, leaders need to wear different hats. They need to be “Chefs” blending two important business ingredients - people and change; “Translators” who listen and understand more than they hear around what is being said; “Explorers” who embrace the unknown with courage and curiosity; and “Futurists” who consider multiple scenarios and think through new possibilities with empathy. But most importantly, they need to be “Change Agents” who champion change by being more agile and adaptive, while  empowering with care.

Why it is important to pay attention to your employees and their wellbeing in your risk strategy.

Employees are the organisation’s competitive advantage - whatever they do has a bearing on customer service delivery, the reputation of the organisation and the implementation of the business strategy. It is therefore important to pay close attention to your employees and their needs. This is even more crucial now as employees are navigating a myriad of challenges both at home and at work. Anxiety and mental health issues are on the rise. Following the Covid pandemic, employees are also re-evaluating their lives to consider what’s most important to them, with a rise in “life audits”. Often the result is employees realising they need more work-life balance, greater flexibility, and other non-monetary benefits.

There are other emerging workplace trends that are revolutionising the work environment and defining a new culture. “Time millionaires” are the people who consider their time to be more important than the money they make from their jobs, common among the Gen Z’s. The “anti-work” movement has risen as a movement to resist excessive work-related stress and demands, actively undermining the very concept of work. In addition, we are witnessing “quiet quitting”, where people mentally check out and just do the bare minimum at work. “Workcations” are also on the rise, where people are working and holidaying at the same time. And of course, the “Great Resignation” is now a worldwide phenomenon. Given these trends, it is imperative as leaders today that we understand our employees and their needs better.

How to respond with practical tactics and tools? Some organisations are considering employee wellbeing more seriously, with several having added new roles such as a Chief Wellbeing Officer (CWO) to create a dedicated focus on employee wellbeing.

Others are working to create a more compelling employee value proposition that considers employee wellbeing and satisfaction. Other initiatives that take into account these emerging trends will position organisations to attract and retain the best talent. Studies also show that there is a direct correlation between employee satisfaction and organisational performance. So when employees are satisfied and happy, engagement and productivity increases and therefore enhances organisational performance. In fact, “happy” workers are 13% more productive, according to a recent study conducted by Oxford University.

In conclusion, organisations and leaders need to continuously assess the impact of the changing environment on employees. We expect our employees to be adaptable, but the reality is that organisations need to set up specific structures and processes that will allow this to happen. If we keep abreast of external disruptions, pay attention to the impact these have on our employees, and then create a focused and empathic response, organisations can build more adaptable and sustainable environments where employees can thrive while improving organisational performance.

“The kind of leader you are is reflected by the people you lead - show me your team and, I will tell you what kind of a leader you are” - Thabile Nyaba

Thabile Nyaba is Chief Risk Officer at Old Mutual Insure and President: IRMSA (Institute of Risk Management South Africa).

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