Systemic Risk Leadership
Systemic risk leadership is good leadership, further enhanced by applied systems thinking behaviours and ways of working to better enable effective risk managed decisions in complex human organisations.
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Fluid, challenging circumstances with no clear “right” pathway forward require high order leadership capabilities.
Unlike when a situation is well understood, leaders cannot safely delegate, simply apply processes and rules, or deal with issues superficially
Systemic risk leadership is the application of systems thinking principles and methods to leadership and decision-making when facing complexity and uncertainty.
The ways in which the principles of good leadership are evidenced in leaders’ thinking and behaviours must reflect the level of volatility, uncertainty, complexity and ambiguity (VUCA) faced.
Factors underpinning systemic risk leadership
Worldview. In complex environments a “systems thinking” view of the world is a crucial advantage. Worldview cannot be taught and is difficult to influence. It is a result of each individual’s life journey.
Emotional Intelligence and Ethics. Accepting ambiguity, making difficult decisions and building trust with others even when they disagree or don’t understand, requires courage and personal confidence arising from understanding yourself and your role.
Skills, Tools, Methods. It is not enough to accept complexity and to think in terms of systems. To lead in VUCA environments requires having, understanding and being capable of applying appropriate methods for inquiry, analysis and decision making in complexity.
System Capability and Design. Poorly designed organisational systems reduce capability and potential outcomes. They are also common root causes of pervasive and often subtle (hidden) systemic risks. Organisational system design and improvement is central to systemic risk leadership – and is a core required capability of all executive leaders of complex organisations.
Do you have the behaviours and skills of systemic risk leadership?
Do you routinely look for systemic sources of uncertainty and risk – and insist that people reporting to you do the same?
Do you use, and expect others to use, tools for finding networks, patterns and interrelationships in risk sources?
Do place a high value on looking for systemic responses to risk – where focused actions influence risk as a whole rather than manage one risk at a time?
In performance management, do you focus on the quality of the inquiry and other work done prior to decisions, rather than the decisions themselves?
Is organisational systems design and development a high priority for you personally?
Are ‘lead indicators’ of organisational system performance more important to you and your role, than monitoring traditional performance targets and KPI?
Do you seek to understand the world-view of people reporting to you, so that you can ensure they have roles that match?
You should be able to answer yes to most or all of these questions.