Lessons on Creating Value through Risk Assessment from the British Royal Navy? Yes, Please!

At the Finance Alliance's summit on finance transformation, I had the opportunity to listen to a presentation given by Stefan Gershater, head of the risk team for Burberry. Learning from Stefan reminded me how much our military veterans enhance strategy and execution in the private sector and how fortunate we are at Stacked Analytics to have a quarter of our founding partners as veterans.

Stefan, a former member of the British Royal Navy, approaches risk from an opportunistic perspective based on his formal military training. Typically, risk can be viewed as “business prevention” and avoided in a business context.  Stefan argues we should look at risk in the context of getting things done and getting the “right” things done.  As finance, business, and data leaders, we should all demand more from risk teams, as there is a link between risk and value creation.   

But how?

RISK MILESTONES

First, business leaders should measure risk at regular milestones based on the “mission” or the aim.   Assessing risk at these milestones should take a systematic approach with open lines of communication.  Business leaders can correct and realign resources during these milestones to target a more favorable value-creation scenario.   Quarterly business reviews can be a natural place for these assessments to occur.

ASSESS BEST & WORST-CASE SCENARIOS

Second, Stefan argues that you should demand more from risk teams at these milestones.  Risk teams’ training allows them to understand best and worst-case scenario analyses.  Typically, risk organizations have the technical skill and business knowledge to be advocates for data science and machine learning as a part of the mission assessment and execution. Suppose you are in an organization that is not large enough to warrant its own risk department, head over to the finance team, as risk is typically a function under the CFO.  Rely on these resources as business advocates to better understand the environmental, political, and economic impact of the “mission” over time.

MAINTAIN THE AIM

Third, as a result of these assessments, the aim should be maintained.  Are we still targeting the proper “mission”?  Are we still able to create the value we intended for our mission? With the rate of change in business today, being able to pivot or adjust at these milestones create opportunities in and of itself by redirecting energy and focus back to where it needs to be based on the changing environment or demands on the business.

KEEP A SENSE OF HUMOR

Lastly,  and maybe the most critical, according to Stefan and his British Royal Navy training, is to keep a sense of humor.  Keeping a sense of humor shows that you can keep perspective in any situation.  Having a sense of humor also helps people feel at ease. Communication is paramount to learning what the business needs and the risks associated with those needs, so assisting people in feeling at ease is invaluable.

As a data strategist and former FP&A leader who sees how quickly environmental, political, and economic factors can impact the direction and execution of strategic plans, I appreciate the approach outlined by Stefan and his military experience; establishing risk milestones, engaging in in-depth scenario assessment, maintaining the aim of the mission all while keeping a sense of humor. I plan to add this element of risk assessment to my ongoing data strategy engagements. Thank you, Stefan!

At Stacked Analytics, we are fortunate to have two partners who bring their military experiences to our team daily.  Mark McKelvey served in the Air Force & Army National Guard, where he started and honed his career in data science and machine learning technologies. Todd Gorrell is a decorated combat veteran who, as a 19-year-old, was the youngest battalion leader in Iraq.  These two bring immeasurable experience, talent, and determination to our team, and we are all enriched as a result.

What military might do you have on your own team?  Need help with your own risk assessments? We have data science and machine learning experts who can help. Reach out, we’d love to hear from you!