RISK MANAGEMENT ROUNDTABLE PARTICIPANTS:
Doug Cornell, President and CEO, Advantum Services
Shantal Feltham, President and CEO, Stiris Research
Jeff Nugent, President, Contingent Workforce Solutions
Ryan Mitchell, Vice President, Ont. Region, RSA Canada
Phoebe Fung, Owner, Vin Room
Doug, your company gets input from all your employees about major decisions. Do you see this as a risk-management tactic because engaged employees will execute better and help you make more informed decisions?
Doug Cornell: I do. No matter what change we're considering, we bring in every employee, from client-service reps on up, to get their input. We find that employees take more responsibility when they know we're counting on them to offer insights into the business and they have some say in what the company does.
Donna Ince: Including your employees in risk-assessment exercises is great because they know when things aren't going well long before you do. They're great at identifying a risk, telling you, "You know what? There's a weather issue, so we can't ship those goods today that have to be at that convention next week."
What do others here think of involving employees in assessing risks?
Jeff Nugent: The Conference Board of Canada has published a paper stating that employee engagement is one of the top ways to mitigate operational risk. You should make employees part of the risk analysis and the decision-making, making sure they know where your business is going and the downside risks to it.
Shantal Feltham: That's what we do. We have a challenge this week at a client, and we'll be getting together to discuss that. And I put it out to my entire team last week and said, "Tell me what all the challenges are, and then tell me how we can fix this." This means everyone has ownership. We also consult closely with our clients. Last year, we were struggling, and a mentor advised me, "Get on a plane and go visit your clients. And don't go in a sales capacity; just go and talk." So, I did 75 or 80 flights in 2011—I was in the air all the time. I'll visit clients and say, "We're about to change our company and here's what we're planning, but we want to make sure we address your needs directly. So, tell me what your challenges are and where you see them coming, so my company can address these proactively." That's how I'm mitigating my risk. In 10 years, my company could be obsolete. And the pharmaceutical company that's driving the most change in our industry is now tell me exactly what they're doing and what my company needs to do in response.
Even if you get input from key stakeholders, ultimately you'll need to make most of the big decisions yourself. What do you do to maximize the odds of making the right decisions?
Feltham: I have an idea of where I want to go, and then I listen to everyone's input. I have some key people I listen to, and if they look me square in the eyes and say, "Bad idea," I stop and take notice. But I'll say this—and my money says that everyone around the table will say the same thing—that at the end of the day, I follow my gut.
Cornell: I agree 100%. I have key people I talk to, including my business coach. And I usually talk to my wife. Sometimes, people under me will say, "You're nuts." But it does come down to me in the end. One thing I'm mulling over right now is creating a board of directors, specifically to help me with big decisions. It would be more of a sounding board and…
Feltham: …to hold you accountable. I'm looking at the same thing.
Jeff, how do you come to the right decision?
Nugent: Often, it's based on understanding what's going on in my industry. I'll come up with a bit of a crazy idea, then say, "This is where we want to go. I think there's something there." Also, we have an advisory board that includes banking and insurance professionals. Because of the high cash-flow needs of what we do, we want to make sure we can navigate the cash flow properly. And I'm a heavy user of social media. I've made a lot of industry connections through that and have made some decisions based on polling my network. That may sound a little crazy in this world of hyper-competitiveness, but you will—depending on your reputation in the industry—find that you get instant responses and great feedback.
Feltham: And honest feedback.
Nugent: Very honest, because it's quick: "I think this, and you should think about that." Based on that, then you can reach back out to those advisors. I'm not saying I send it out to all my 1,500 contacts, but you know which ones make sense to ask. If it's a big decision, I'll often ponder it, ponder it some more, then sleep on it for a month. And then I'll move forward. Phoebe, how do you handle big decisions?
Phoebe Fung: I'm a big fan of evidence based decisions. But, after weighing the evidence, I'll listen to my gut. One thing that helps me make decisions is that we have an advisory board. When I set up my company, I created it by choosing my shareholders. I asked myself, "Whose skills do I really need?" But I didn't really want to pay for that. So, I asked people to become my shareholders, pretty much saying, "You're going to invest in a business in a sector with an 80% failure rate. We'll look to you to give us free advice as a shareholder, and you're going to pay full price when you come in. Welcome aboard!" And we got a bunch of people who said, "That's a