Risk management is changing, which means that those who work in the profession need to change too. Strategic Risk caught up with Anders Esbjörnsson, Group Risk Manager, Construction company NCC to find out why he thinks communication is critical and how an MBA helped transform his approach to risk
“The risk map is getting broader and it is getting much harder to grasp the full picture of risks that an organisation faces, says Anders Esbjörnsson, Group Risk Manager at NCC. He should know, he’s been in his current risk manager role for over a decade and worked for both insurers and brokers before that.
He says that his insurance background was extremely useful when he made the jump to risk management all those years ago, not least because it gave him a thorough understanding of the real costs of a risk.
He explains: “I had a wide variety of roles, working in broking and core insurance areas such as underwriting and loss adjusting. When I moved to risk management it was very helpful to understand the consequences of risk and the methodologies used to calculate risk. If you come from insurance, it’s wise to have had a number of posts or jobs within the industry.”
A broadening approach
Despite the relatively easy transition, Esbjörnsson says that the role of the modern risk manager now is very different. The risks are more various – not to mention more volatile – and as a result the industry needs to develop new skills.
He says: “Previously, if you had a solid background in property insurance and knew a lot about liability and tort law you could do an extremely good job and – while you were depending on other people and especially site managers - you could do a lot of things by yourself.
“We cannot work in isolation to try to manage risks in silos because no risk is an island”
“Nowadays, I am a lot more much more dependent on internal co-operation to understand the risk profile of the company.”
In large part, this transition is because of some of the big risks that are increasingly high up the corporate agenda, for instance cyber and climate change. Esbjörnsson argues that these nebulous and constantly changing risks require risk managers to break down silos and work closely with other departments, such as IT security, health and safety, sustainability, HR and finance.
He says: “We cannot work in isolation to try to manage risks in silos because no risk is an island. They are all interconnected and so the main challenge for me, my company and other companies to find the best ways to team up internally.
Moving on up
As well as dealing with colleagues in other departments, Esbjörnsson says that risk managers today must also be able to engage with senior c-suite or board members.
Never an easy task, he points out that the profession needs to develop business skills such as presenting and networking. He also passionately believes that risk managers need to get inside the heads of senior managers and see what makes them tick. This is something that he is trying to promote with his roles both at the Swedish risk management association and at FERMA.
”Without networking and social skills and skills in presentations you will not get time with the executive team nor in the frontline organisation”
He explains: “In the past, risk management was made up of lots of technical specialists and engineers with fantastic technical skills but had difficulties communicating. But this is the key point, to be a successful risk manager, you must understand the business and the complexity.
“And without networking and social skills and skills in presentations you will not get time with the executive team nor in the frontline organisation. You need to be able to communicate.”
One thing that helped Esbjörnsson master the business side of his role was his MBA. He says that it gave him invaluable insights into how a CFO calculates risks, what figures and numbers they are likely to care about and a deeper understanding of how risks impact a business.
In turn, he argues that this has made him more valuable to senior management as it means he can keep his presentations crisp, to the point and ultimately engaging for senior management.
One of his top tips for board engagement is to spare the details, arguing that board managers need to know what you have concluded, but not necessarily how you made the journey.
”People want to know why it is good and adds value, but how you do it is completely unimpressive.”
He says: “if I have the opportunity to give a ten-minute presentation to my board, it cannot be about me and the fantastic details of the work my team and I are doing.
“That’s the problem with specialists, they want to tell every detail, but no one cares about the details. People want to know why it is good and adds value, but how you do it is completely unimpressive.
“Of course, you must have 100 per cent control of the details, but if you have that then you can be so confident enough in the presentation that you don’t need to show them. That’s the challenge - the balance between being so skilled you can have the control of details but having the confidence, so you don’t need to show it. It’s hard.”
Creating a culture
Part of the reason these communication skills are so critical is because they help create a risk culture, where everyone from the shopfloor to the boardroom understands the value of risk management and what the risk department is bringing to the table.
Indeed, getting everyone on board with risk managers is one of Esbjörnsson’s greatest achievements of his career to date.
He concludes: “when I first started this role, the risk management team and insurance captive did not have any trust within the management team nor in the wider organisation, people didn’t really know what we were doing and why we were doing it. There were three excellent specialists working doing a fantastic technical job, but they had no way of showing that to the rest of the organisation.
“In a very short time we had the full confidence of the management team and we were asked to come and present our work and work together with them.”
“When I arrived, the first thing I did was to produce internal brochures which I handed to everyone I met. This was just an eight-page document that explained what NNC risk management was, what we were doing and what value we added to the organisation.
“I spent a lot of time on internal promotion, it was almost like a sales meeting where I was an external company. And that work paid off hugely. It’s a big company so things move slowly, but in a very short time we had the full confidence of the management team and we were asked to come and present our work and work together with them which was completely impossible when I joined.
“So that changed the whole idea of risk management and was what shaped the captive insurance company internally. I think it would have been liquidated if I hadn’t been able to do it because no one was able to show the benefits, but now I’ve been running for some years and we can show the extreme value of it. That’s the one thing I’m most proud of.”