How Does Risk Relate to Strategy?

From the new Spark whitepaper, Risk: The Missing Link Connecting Strategy to Implementation, co-authored with Jamie Notter ( and Leslie White (Croydon Consulting):

Risk management is an intrinsic part of strategic thinking. When considering a strategy, you must first determine whether that strategy aligns with your risk appetite…The biggest challenge associations face in establishing a culture of strategic risk management is to get people comfortable thinking and talking about what could go wrong—or right—on the way to realizing your excellent new ideas. The key is to match your risk exposure to your risk appetite, while not undervaluing potential lost opportunity.

Like what you read? Want more? Download your free copy at

Why Does Risk Matter?

From the new Spark whitepaper, Risk: The Missing Link Connecting Strategy to Implementation, written with Jamie Notter and Leslie White:

The risk management process involves the continuous identification, assessment, prioritization, and selection of risk management techniques; implementation; and monitoring of outcomes.

But what if the board and senior team members don’t all agree on what the risk is, how likely it is, or what impact it might have? What if the decision-makers don’t have the same appetite for risk? What if they don’t accord the potential opportunity the same level of importance? Risk management sounds straightforward in theory, but the effective practice of risk management requires broadening your awareness about uncertainty and risk and integrating this risk awareness directly into your strategic decision- making. You need to define your risk strategy.

Want more? Download your free copy at

Risk: The Missing Link Connecting Strategy to Implementation

I’m excited to share the launch of the fourth whitepaper in the ongoing Spark whitepaper series, Risk: The Missing Link Connecting Strategy to Implementation.

Co-authored with Jamie Notter ( and Leslie White, CPCU, ARM, CIC, CRM, (Croydon Consulting), the whitepaper tackles the question: why do senior teams have so much trouble with strategic decision-making?

Our answer is that a major contributing factor is that they are unable to have good conversations about risk, risk management, risk appetite, and how that all relates to opportunity and opportunity cost, because they avoid conflict and have a mistaken understanding of what constitutes consensus. The whitepaper shares both theory and techniques to help senior teams have better conversations, make more informed choices about risk and opportunity, and ultimately, be more effective in forming and implementing their strategies as a result.

I’ll be blogging about the contents of the whitepaper all week, but in the meantime, pick up your free copy at, no divulging of information about yourself required.

And don’t forget to check out the other Spark whitepapers:

“That Sounds Risky…”

Back in June, Leslie White (Croydon Consulting) and I presented a session for ASAE’s Finance and Business Operations Conference (FHRBOC). It was a simulation on risk management. We had assumed, given that it was a room full of accountants, that everyone would a common understanding of, and language around, risk.

Boy, were we wrong.

And it got us thinking: when senior teams are trying to make decisions together, do they suffer from the same problem? A lot of what we do or consider doing in associations involves the assumption (and hopefully mitigation) of risk. What if senior teams don’t share an understanding of what that means? How can they even have good, open conversations?

Well, as soon as we started thinking about good, open conversations, we realized we’d want to involve Jamie Notter (Management Solutions Plus), too.

So here’s what we’ve come to:

In today’s environment, an association’s success is contingent on its ability to make good decisions quickly. Heading in the wrong direction, or simply treading water while you try to decide, will move you further and further behind your competition. Today’s competition is tougher, and the margins are thinner, so we simply can’t afford to fumble our way through decision making.

Nowhere is this more evident than at the management team level. Here you have a group representing diverse interests that is tasked with making strategic decisions to support the whole enterprise. Yet the topic of how decisions are made (and what methods and processes would be best) is rarely tackled explicitly. Despite the imperative mentioned above, we actually do fumble our way through decision making.

As consultants, we see this problem and want to do something about it, but only if it actually makes sense to association execs, and only if we’re not duplicating what other smart consultants in the association space are already doing. So we have a few questions for you.

  • What is your experience with decision making at your organization?
  • What kinds of conversations do – or don’t – you have about risk?
  • If you are experiencing problems in these areas, what impact is it having on your organization? Your staff? Your relationships with your volunteer leaders?
  • Is there a need here?
  • Have you worked with somebody great who’s helped you through this, where we should talk to her first or just get out of her way and let her do her work?

Short version: we think there’s a problem here, we’re interested in trying to figure out how we fix it, but we’re not interested in trying to reinvent a wheel someone else has already done a better job creating.

What are your thoughts?

Can I Trust You?

I’ve been thinking about issues related to trust and risk ever since Jamie Notter and Maddie Grant‘s unsession on their forthcoming book, Humanize, at #ASAE11.

During the session, Jamie made a really interesting point: trust and risk are correlated. As trust goes up, risk goes up. In order to lower risk, we also end up lowering trust.

Ever wondered why staff members have such strong reactions to new policies at your association? Voilà. That reads, on some level, like you don’t trust them.

Here’s the thing: we can’t just throw out all our policies and skip merrily along trusting everyone completely and all the time. First of all, my many lawyer friends would be out of business if we did. They’re all smart people, so I’m sure they’d find something else to do. But the unemployment rate is high enough right now.

But also, it’s not realistic. There are people out there who, through ignorance, accident or ill intent, can harm our associations. Our members and the other communities we serve have the right to expect us to do what we can to protect our associations, by preventing what risks we can and being prepared to ameliorate those we can’t.

On the other hand, our staff members deserve respect and professional courtesy. After all, if we can’t trust them even a little bit, why did we hire them in the first place?

I don’t have the perfect answer to this. In fact, there isn’t one. Different organizations have different levels of tolerance for and exposure to risk. If you deal with credit card or HIPPA protected data, you know exactly what I mean.

I think this raises and important consideration for us as part of our own risk calculations. We often focus on the downsides of being more open, more trusting, etc in assessing risk. Do we think about the other side: what is the risk of reducing trust? Now that social media is, to quote Jamie, “kicking our asses” maybe we need to weigh that side of the calculation a little more carefully.