Failing to See the Risks

About 30 years ago, a newly-hired executive stepped into GE Capital headquarters eager to get to work.

His job didn’t have an official title, so James Lam was given permission to invent one for his business card — and settled on “chief risk officer.”

Over the years, CRO has become an essential position in firms and corporations and is commonly viewed as “the most thankless job” in banking.

But the role has garnered lots of attention recently with the fast collapse of Silicon Valley Bank — and it has some important lessons for us as coaches, executives and teachers.

SVB did not have a chief risk officer in place for most of the past year, leaving it extremely vulnerable to threats and rising interest rates, according to reports. 

“The chief risk officer is supposed to be the human safeguard against calamity, someone who handles a bank’s dull but vital compliance issues and elevates concerns to the C-suite,” the Wall Street Journal wrote.

In essence, it’s a crucial position that SVB seemed to ignore — and it paid the price. 

Just about all of us as leaders have great ambitions for our teams and are extremely focused on going down the most efficient path to achieve our goals.

We pour over strategies in exhausting detail, fine-tune our approach and put who we feel are the right people in place to executive our visions.

But failing to also consider what could go wrong, what external threats exist or where we might be susceptible to turbulence can completely negate our hard work.

While we may not be in banking and may not have the hiring capacity to bring on someone who can solely focus on hazards, we can all do a little better to more closely consider what could go wrong.

It may mean assigning a single person to consider potential threats and shortcomings or routinely doing this within our collective leadership team. 

Ultimately, there may be some danger signs out there today that, if spotted, can help us avoid the calamities of tomorrow.