Picture it: A world-ending threat is looming, and you happen to be the chief of security to the president of the United States. There is a plan of escape—thank goodness—but you don’t know all the details. What you do know is you have to do your job: secure the president. But your sanity insists you ensure the safety of your family as well. This might sound a bit far-fetched, and… that’s because it is. It just so happens to be the premise of a new hit TV show I’m mildly obsessed with, starring the absurdly talented Sterling K. Brown. On the show, he mitigated this larger-than-life risk in a thrilling (and arguably frustrating) way. In a real-world, professional context, however, risk management (certainly risk management training) is slightly less entertaining but incredibly serious nonetheless.
The threats that plague most organizations are typically not life-threatening, but that really depends on the industry. The consequences surrounding risk management can be catastrophic. Unmanaged risks can lead to dire losses of many kinds, most commonly financial. Good risk management ensures that both resources and investments are protected. It makes people feel safe and secure. It’s about being responsible and thoughtful with an organization’s most valuable assets.
As a leadership and development (L&D) professional, you are at the helm of risk management and mitigation. You are the primary enabler, the first line of defense.
You are Sterling K. Brown.
Yes, risk management is a shared responsibility across multiple roles and departments, including compliance officers like the chief risk officer (CRO), internal auditors, executive leadership, and human resources (HR), but L&D professionals are the very arms and legs of risk management. Proper, timely risk management training implemented by a capable L&D practitioner can mitigate risks related to compliance, technology, and human resources.
L&D professionals can serve as proactive partners in risk mitigation by ensuring employees have the knowledge, skills, and awareness to preemptively stop risks before they become significant issues. Enterprise risk management training can solve the problem—on a broad scale—before it begins.
The consequences can be dire when organizations aren’t adequately prepared for impending risks. Several industries are particularly vulnerable to the impacts of poor risk management and face the threat of significant financial, reputational, regulatory, and operational devastation when risk management goes wrong.
Vulnerable industries:
The collapse of Silicon Valley Bank (SVB) is a cautionary tale worth telling. SVB was once the 16th-largest bank in the United States. In March 2023, however, it collapsed due to a combination of poor risk assessment and inadequate liquidity management. During a period of low interest rates, the bank invested heavily in long-term treasury bonds. As the Federal Reserve raised rates to combat inflation, the market value of the bonds declined, leading to substantial (unrealized) losses. At the same time, many of the bank’s clients withdrew deposits to meet their own liquidity needs. To raise capital, the bank sold assets at a loss, triggering a bank run that ultimately resulted in bankruptcy.
Now that you have been sufficiently depressed by all the ways poor risk management can go wrong, we need to talk about the bright side: when effective risk management saves the day. Stories with happy endings are arguably more important to tell. Risk management training for employees can shift company culture and give companies the ability to anticipate—and circumvent—challenges and implement strategies to mitigate potential adverse effects.
The Norwalk Fire Department in Connecticut instituted a well-rounded risk reduction and wellness program focused on firefighter fitness, mobility training, nutrition, and mental wellness. Since its inception in 2019, the department has achieved a 27% annual reduction in workers’ compensation costs, decreasing claim severity from $919,000 to $255,000 over five years. This proactive approach enhanced firefighter safety and garnered the department a state-wide award for risk management.
Risk management training for employees isn’t just a good idea; it’s imperative. A strong L&D function enhances workforce safety and competence and prevents costly mistakes, breaches, and legal issues.
Risk management training using immersive tools like ELB Learning’s CenarioVR creates a safe space to fail without the cost of real-world mistakes. CenarioVR is a user-friendly virtual reality course creator that allows you to deliver customized, three-dimensional learning experiences with very little effort. In fact, ELB Learning has a suite of digital learning products that are perfect for risk-free enterprise risk management training.
Was this a thinly veiled ode to Sterling K. Brown shrouded in sound business advice? Perhaps, but that doesn’t negate the facts: L&D professionals are the unsung heroes of risk management. So, be a hero. Channel your inner Sterling and implement risk management training for your organization.
To learn more about how to develop risk management training for your organization, click here.
1. What is risk management? The process of identifying, assessing, and mitigating potential risks that could negatively impact an organization, project, or individual. It involves analyzing uncertainties, developing strategies to minimize their effects, and implementing controls to prevent or reduce harm.
2. What is risk management training? A structured program designed to educate individuals and organizations on how to identify, assess, mitigate, and respond to risks effectively. It equips employees, managers, and executives with the skills and knowledge needed to minimize potential threats and ensure business continuity.
3. How do L&D professionals facilitate risk management training? They first have to understand the business and its risks, then use that information to translate complex risk concepts into practical, engaging training programs that drive awareness and proactive behavior. They also track participation, measure effectiveness, and ensure compliance.
4. How can L&D professionals support risk management/mitigation? L&D professionals play a critical role in strengthening an organization’s risk management strategy by ensuring employees have the knowledge, skills, and behaviors needed to identify, assess, and respond to risks effectively. By embedding risk awareness into training programs, they help organizations prevent crises, ensure compliance, and create a culture of accountability.