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Is Risk Management the CrossFit of Professional Services?

3 parallels between Risk Management and Crossfit

Those that know me well would understand that I really enjoy stirring the pot, so I will say as a preface to this article that while this content is designed to be purely tongue in cheek, there are hopefully some genuine insights buried in there somewhere. So if you’re game read on.

Now that we apparently live in a world where regulatory change in many industries feels like it occurs via royal commission, phrases like “risk management” and “culture”  have apparently now become very on-trend. However, just like every other cycle of fads and buzz words that move through the business landscape,  it can be helpful to try and look past the hype and see the foundational concepts underneath.

1. Neither really existed 20 years ago

Risk Management or Risk and Compliance functions have existed in many different industries for many years, particularly in high risk and/or highly regulated industries. However, the function was often attached to another department such as finance or assumed to be only relevant to managing health and safety or environmental risk-rather than the more contemporary structure where the function is used to reduce and eliminate exposure through avoidable non-compliance costs and is also incorporated into the lifecycle of business decision making at a Strategic and Enterprise level.I’m sure you can see where I’m going with Crossfit… the core disciplines that make up the concept ( Athletics, Gymnastics and Weight Lifting) have existed for millennia but have more recently been incorporated together.

2. Risk Management, just like Crossfit incorporates aspects of a number of different disciplines to create  something that others argue is not as good as any of the component parts

Risk Management in heavy industry sectors has often assumed to be only relevant to Health, Safety, and Environment, so in those sectors many practitioners come from that type of background. As most of my career has been in the resources sector, that is my background too. In comparison in sectors such as Finance, Aged Care and Banking, Risk and Governance Professionals have historically come from career backgrounds such as Accountancy and Law and have often tended to focus on the management of financial risks rather than the more esoteric people and culture related risks. There has also often been a tendency to separate and address Work Health and Safety Risk in a siloed manner. While I recognize the history of that approach, I now see more and more organisations understanding the value of managing risk in a holistic Enterprise fashion in order to maximise line of sight for the directors and executives of an organisation. So the naysayers could argue that contemporary risk management is a hodgepodge of WHS, Accountancy, Law, and Actuarial studies all mashed together to create a function that sounds great for an organisation but in reality, often ends up being little more than an overhead. In the same way, Crossfit could be conceived as a hodgepodge of Athletics, Gymnastics, and Weight Lifting packaged as a product that is not as good as any of its individual component parts.

3. It’s full of jargon, acronyms and tech-speak that can feel like it’s designed to confuse

Risk Management, just like Crossfit survives on a healthy diet of self-created acronyms, Pseudoscience, Assumptions  and Jargon,  designed to insulate it from criticism and make practitioners appear unique or special.

Despite the shiny façade, many of the fundamentals of risk management haven’t changed much since the second edition of  Robert J Gordon’s “Macroeconomics” textbook was published in 1981 and many organisations already do it very well, they just often don’t make it consistent, defensible and systemised.

When it’s done well, good risk management, just like Crossfit creates discipline, consistency, and performance for an organization that allows the organisation to trim the fat, build muscle and ultimately create competitive advantage in a crowded, competitive market.

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