If you are going to fully operationalise your Risk Appetite Statement (RAS) you need to go mental. Developing Mental Models is what I am talking about. Let me explain. Over the past month I have suggested you need to: support your teams by documenting the organisation’s appetite for risk; guide their decision making by reviewing
You have heard the term “Tone from the Top”. To operationalise your RAS you are going to need to “ding the bell” to make sure the leadership team are delivering the right tone. When I say leadership team, I’m talking the broader leadership team, not the Executive that worked with the Board to establish the
You have your top-notch RAS and you are ready to devolve decision making by operationalising it. My number one tip for operationalising your RAS comes from reading a book first published in 1946. It is called Administrative Behaviour, A Study of Decision-Making Processes in Administrative Organisations by Herbert A. Simon. Simon is a Nobel Prize
Craps is a gambling game using dice. It became well-known to me from the Hollywood movies of mid last century when players gathered around a Craps table and rolled and cheered or expressed their frustration at loss after loss. Before you start rolling out your Risk Appetite Statement (RAS), and devolving decision making to evolve
In their McKinsey article “Decision-making: how leaders can get out of the way”, Iskandar Amino, Aaron De Smet and Kanika Kakkar highlight the need to devolve decision making for organisations to become more agile. One thing they did not mention was that devolved decision making needs communication about the organisation’s appetite for risk in certain