Back in 2015, McKinsey published a paper on the future of risk management in the banking sector. At the time I sent it to many of my clients in other sectors because of its very important messages, including this one in their summary:

“Bank risk management will likely look dramatically different by 2025, when it has become a core part of banks’ strategic planning, a close collaborator with business heads, and a centre of excellence in analytics and de-biased decision making.”

Well, it’s 2025 and while risk being core to strategic planning may be true for many banks, it certainly isn’t true for many, many organisations across all sectors. Risk is still seen as a compliance activity for the comfort of the board, regulators and other stakeholders.

For the record, strategy and risk are two sides of the same coin AND they go hand in glove.

The inseparable coin analogy: You need to know your strategic risks so you can design the most appropriate strategy.

The close-fist hand in glove analogy: You need to know the risks you face to successful execution of your strategy.

If your strategy has not been working for you, did you separate the coins or forget to try on your gloves?

As a C-Suite Leader, conduct a strategy review by revisiting the risk landscape and make adjustments accordingly.

As a Risk Leader, lead the development of understanding of the risk landscape. If you haven’t got my book Team Think, get in touch to find out more about my Meta-Mental Model methodology for helping with that.