Fear is normal and critical to our survival. Fear tells us that something may harm us, and we need to act. Fear does not magically disappear when we put on our business suit. Yet, being scared is actively discouraged in the work place and doing so undermines our competitive advantage.
Fear influences our behaviour whether we want it to or not. Fear causes the “Fight or Flight” reaction and while we cannot stop this happening we can learn to respond to our fears in more productive ways.
When we experience fear our brains look to our memories to know how to react, and influences how we react. Often this happens before we are even aware of it. We jump when we hear a sharp noise. The first thing we will notice is our reaction, and then we try to figure out what caused it. This automatic reaction to fear happens everywhere including in the Board Room. We are all aware of when fear causes us to jump, or stop, or grab hold of a child. We are less likely to be aware of how fear influences us in the Board Room.
In all cases, fear causes us to protect ourselves. Fear, in the Board Room, shows up in two ways. One response is to look for someone to blame. The other is to hold back from saying or doing something. When fear causes us to react in one of these ways, we quickly loose sight of the fear and become focused on blaming or avoiding in an attempt to protect ourselves. Neither of these reactions actually deal with the fear. These reactions will inadvertently lead the team to make poor decisions.
The future is uncertain. Fear in the Board Room is generally focused on a fear of poor/detrimental future outcomes. Some future outcomes are desired, and others are scary. Fear acts subconsciously. A management team, when considering the future, will focus on the desired and avoid the undesired outcomes. Plans will be biased toward the desired. The main reason is that we fear colleagues around the table will be unsupportive if we are open about our real fears and concerns.
“Risk” simply refers to uncertainty in the future. Fear is our emotional response to risk. Managing risks and fears are the same thing. Therefore, an effective Chief Risk Officer (“CRO”) and an effective risk management program enables an organization to face and overcome the challenges of the things that induce fear. Leadership when dealing with the disabling and sabotaging affects of fear as part of business decision making is Risk Management therefore comes from the CRO.
A knowledgeable and skilled CRO understands the dynamics of fear and how it impacts decision making. They have the skills to effectively empower and activate a team to overcome the detrimental impacts of fear and see the useful/ embedded information for success that fear aims to communicate.
When an organization embraces the role of a CRO in helping the team overcome the impact of fear, they will discover the competitive advantage of superior risk management and experience powerful and effective solutions in the process of transforming fear into leveraging power.
At Simplified Risk Management Inc., we understand the important role fear has on an effective risk management. Our approach to helping you “simplify risk management so you can focus on what is important” includes helping you understand fears and develop techniques to succeed. We appreciate the contribution of Abby Napora in writing this article.