If you want to know about risks, ask a risk taker
Last year Skating Panda was invited to speak at the opening plenary of the Charity Finance Group’s Risk Conference. The focus of the conference was risk and our session was called ‘Risk Horizon Scanning’.
There was a wonderful irony in being given such a brief as we had just being carrying out client feedback where Skating Panda was described as being ‘brave’ and ‘inspiring our clients to be more ambitious in their thinking’ (concepts that are not often associated with caution). However, happily, clients also described our approach using words like ‘diligence’ and ‘care’.
So, we thought we would live by our own ethos and responded to the brief by challenging ourselves and the audience to take a different view of risk. Rather than focusing on how to spot clouds on the horizon, we encouraged the CFOs of the UK’s biggest and most influential charities, to consider how building resilience inside the organisation can enable risks to be managed and create opportunity.
Classifying risk – a (sometimes painful) must do
Generally, risks will need to be considered in terms of the wider environment in which the charity operates. The financial climate, society and its attitudes, the natural environment and changes in the law, technology and knowledge will all affect the types and impact of the risks to which a charity is exposed. We created our own system of classification which aims to ensure that key risk areas are considered and identified – whether they arise from internal or external factors. Here it is:
Next we asked ourselves, is this really what the risk horizon looks like for Skating Panda’s clients in the charity sector?
The answer was yes, and no.
These are, of course, real risks to a charity; in fact, the Ecclesiastical Charity Risk Barometer 2019, includes all of them. However, we know that these risks co-exist and are interlinked; they certainly don’t live in neat silos.
Which means that, in reality, the risk scenario looks more like this:
As much as our brain works in a linear way and tends to apply linear thinking to systems, and isolate elements and look for a cause-effect relationship between each element, this is not how complex systems work.
And the world in which charities operate is complex. Multiple risks interact with each other and can hardly be addressed individually, only within entire systems.
It’s about (clarity of) purpose
So, what is it that can help charities face this complex system of risks?
The answer, in a word, is Purpose. Not so much the metrics and measurements you use to track success and spot problems, not the minutiae or risks and mitigation strategies, but asking, and answering, the big, existential questions – your role in society, the value you create, and how you do this.
To be clear, we’re not saying that a set of words is going to give you the answers. It won’t. However, what a clear statement or purpose will do is speak to your organisation’s values and culture and bring clarity of focus to the way you operate in the context of this global, complex systems we live in.
Indeed, clarity of purpose will provide your organisation with:
- clarity of ‘value’ –the reason why your organisation exists, the value that you are uniquely adding to society and how you are going to achieve your objectives;
- clarity of ‘expected behaviours’ – what is expected from the people who work for your organisation, what objectives they should be working towards and how they should expect to receive feedback;
- supported autonomy – the sense that people working in your organisation are able to take direct action – that will result in real change – because they feel they belong to the organisation and they can push themselves, as they are supported in gaining mastery of tasks and learning different skills.
Bouncing forward, not back
Having all of this will make the people who work for your organisation resilient, which will, in turn, make your organisation resilient.
This is not to say that challenges won’t hit your organisation. It’s inevitable that they will. However, what resilience will allow your organisation to do is to bounce forward – rather than back – when those challenges hit.
by Camilla Beretta, Strategy Executive, Skating Panda