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How To Be A Better Risk Manager:
Skill Sets For A Successful Risk Management Career

By Ben Schull

What does it take to have a long and successful risk management career? Pamela G. Rogers, director of risk management for Sears, Roebuck & Company, and Tim East, manager of the risk management business process for The Walt Disney Company, discussed both the responsibilities and the necessary skill sets of risk managers at the 28th Annual Risk and Insurance Management Society conference in San Francisco.

Have a Vision

According to East and Rogers, risk managers should encourage management to think about risk before problems and claims occur. At Disney, East and his risk management team present a risk overview to each business unit that outlines Disney’s risk management philosophy. They also create a risk vision and mission statement for each significant business unit. East urged risk managers to be a visionary leader for their company, rather than merely waiting for claims to occur.

After a vision has been set, risk managers should work to lessen each business unit’s level of risk by identifying the needs of each business unit and creating ways to broaden and improve coverage. At the same time, risk managers must keep in mind that their ultimate goal should be to reduce costs. Finding ways to control costs by easing the burden of administration and insurance for the organization will improve the risk manager’s value to the company.

Communicate

According to East, the ability to communicate is the most important risk management skill. Corporate risk managers should think of their company’s business units as clients to whom they are providing risk management services. Because risk managers wear various hats, many people in the organization may be unaware of the risk manager’s value. Risk managers should take the initiative by offering to present risk management overviews at business unit meetings. Communication skills can be honed in educating the company executives about the importance of effective risk management.

Risk managers must also be able to work with people in all levels of the company. It is important to remember that few people have absolute knowledge of their organization. Know who within the organization has the answers. For example, the chief financial officer is just one of many people who have information important to the risk manager. Risk managers must be able to find the people with pertinent information and communicate with them in a language they understand. Allowing these people to provide insight into business operations can be invaluable to the risk management team. A successful risk management career stems from understanding the value of colleagues and using their knowledge to learn.

Get a Well-Rounded Educational Background

A well-rounded education is particularly important in understanding the diverse operating units of a company. In addition to an undergraduate education in business, continuing a business education will strengthen knowledge of a breadth of issues. Basic understanding of accounting and finance as well as insurance provides an edge that can make risk managers a vital and respected member of the organization. Additionally, there are many professional groups such as FRM, ARM, and CPCU that can provide continuing education in insurance and risk management.

Risk managers must also have a keen analytical sense and ease with numbers. Obviously risk managers must be comfortable with numbers and enjoy working with them, but according to East and Rogers, a true analytical sense is more important and appreciated by other financial officers in the organization. An MBA program that emphasizes analysis in economics, finance, and accounting is an excellent way to increase analytical skills.

Get Organized

As with any professional career, organizational skills are important for risk managers. Prioritization is a crucial extension of organization, and risk managers must be able to juggle several projects at once. Successful risk managers find energy in the chaos around them and thrive on juggling their responsibilities. Rogers suggests relying on a paper or electronic planner for organization and taking meeting notes, which can double as a diary to review at the end of the quarter or year. Meeting notes will allow the risk manager to take stock of goals achieved and reorganize priorities for the future.

Know Your Company

Risk managers must have an appetite for knowledge and should continually ask questions to garner basic knowledge about all aspects of the company. Risk managers should seize every opportunity to learn, but at the same time must be generalists because of the volume of their responsibilities. Meeting and working with employees in the company is an excellent way to learn. Risk managers should be willing to roll up their sleeves and hit the trenches with the employees of the company. Venturing out into the field to learn about the problems employees encounter increases the understanding of what really makes a business work. For example, Rogers travels with Sears servicemen to customers’ homes to understand how their customer service really works. East agrees that learning through direct experience is often more valuable than being taught.

Know the Industry

Another avenue risk managers can take to increase their knowledge is speaking with recruiters in the business. Simply talking with recruiters does not necessarily equate to job hunting. Recruiters can be invaluable resources, knowing the skills and qualifications companies want in risk managers. Reading business and insurance publications, as well as smaller risk management trade publications, is the key to understanding the concerns and issues facing superiors—those are the publications they’re reading. Attending local Risk and Insurance Management Society (RIMS) chapters can give you the opportunity to network with people in the risk management field.

Risk managers, like all business professionals, should focus on professional growth to improve their skills and knowledge. And most importantly, risk managers should be enjoying themselves. Despite the inevitable obstacles and demands, a risk management career should be both enjoyable and stimulating. Because risk managers benefit every aspect of the company, they have the opportunity and the responsibility to increase the company’s growth, productivity, and profitability. 

ABOUT THE AUTHOR

Ben C. Schull, CPCU, ARM, is a Senior Vice President in the Risk Management & Consulting Services practice of Near North Insurance Brokerage, a member of the Near North National Group.

riskVue | The webzine for risk management professionals
July 2000