“To get something you never had… You’ve got to do something you never did.”
Isn’t it time Risk Managers claimed their rightful places in retailer boardrooms around the world?
I have lost count of the number of times I have heard Risk Managers bemoan their lack of representation “at the top table.”
Historically “Loss Prevention” (as it was then referred to) was an outsourced function focusing on investigation based activities only. The “internal police.” Today a modern retail operation needs a complete function touching all business areas through multi-faceted, interdependent activities. Put another way, the market is simply too competitive for retailers to be losing up to £3 out of every £100 that they take in sales revenue. That’s’ the entire profit for many, and a significant proportion for all.
Retailers are smart. Their leaders are smart. You just simply do not succeed in retail these days unless you are. So it begs the question, when Risk Management has such a crucial role to play, why are Risk Managers not only absent from the boardroom, but one of the first to be culled when budgets are constrained and there is the prospect of hard times ahead, as there is now. Surely the smart money would be spent on plugging the “leaky bucket,” rather than speculative strategies for expansion and investment with long term profit potential. After all a pound saved is a pound earned, a bird in the hand is worth two in the bush and… well you get the idea!
Perhaps the problem lies with Risk Managers themselves…
Is it the case that in order to get that top seat at the top table then top people in Risk Management need a new approach. As Denzel Washington famously said, “To get something you never had… You’ve got to do something you never did.”
So, this week we are looking at the contribution of Risk Managers in a holistic business environment with a view to spurring readers on to explain better what they are doing and to demonstrate value to those who can elevate their profession… and save their jobs!
In particular the notion that online is “where it is at” is a dangerous one for retail leaders. The implication is that online growth means digital crime. It doesn’t. EVERY crime committed online involves, at some point, an offline actor. Even if that ultimately is just the perpetrator. Online crime is simply a digital manifestation of the real world.
Company approaches vary, but the days of Risk Management simply being limited in contribution to being the “internal police” are long gone. Today the best Risk Management functions support total loss management to minimise business losses. Modern Risk Management encompasses compliance, training, strategy, planning, security management, business feasibility, data interpretation, fraud prevention, incident response, investigation and loss mitigation.
Looking at the above spectrum of today’s Risk Management operations, and the obviously significant contributions it can make throughout an organisation, it is hard to think of another department with such an expansive remit or one where the contribution to the commercial success of the business could be greater. And yet other functions, such as accounting, are seen as more important to the operation of a retail brand in challenging times… when Risk Managers are being culled. That makes no sense!
My challenge to all Risk Managers is to set a goal to bring to the attention of key people at the highest level of corporate governance the contribution made by Risk Management and to challenge them as to why it is seen as a “nice to have” rather than a business critical function.
Maybe then we can finally start to see more Risk management colleagues getting the seat “at the top table” that they in particular, and the profession in general, deserves.