Today’s world is full of risks that confront leaders from all angles. Natural disasters, political change, cyberthreats and the financial downturn are only a few risks leaders in the public sector have had to face in recent months. Developing leaders who can manage those kinds of risks in the public sector was the topic of education session “Risk Leadership in the Public Sector: Are You Ready to Grow?” at the Public Risk Management Association’s annual meeting.
Analysis of character traits of successful leaders in the public risk arena settled on two themes: flexibility and accountability.
Leaders must manage risks that are obvious but remain nimble enough to adjust to unforeseen strains. For example, many risk managers plan for the ramifications of a financial crisis, but a long-term financial downturn breeds trouble five, six or seven moves down the chess board. The recent financial crisis has forced many aging workers to remain employed longer than expected. Older workers don’t necessarily get hurt more often, but when they do, they usually take longer to recover and return to work. Successful risk-management leaders are flexible enough to accept that such issues are hard to foresee, and they are willing to adapt to handle them.
Accountability plays differently in the public sector than it does in many areas of the private sector because demands of shareholders — whether they eschew risk or call for it in excess — are not in play. The public’s interest and dollars are at stake, so problems must be dealt with in a straightforward manner. Successful leaders in the public risk sector build trust and respect by “owning the problem” when there is a failure and sharing the credit with all involved when there is success.
The financial crisis raised the prominence of risk management, but with that brighter spotlight comes increased expectations and responsibilities. Dynamic public risk leaders understand their speaking, writing and group-management skills can be as vital for success as industry expertise. “We need to communicate confidence better,” said Matt Hansen, MPA, director of risk management for City and County of San Francisco.