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Simon Sinek Addresses RIMS 2013 with Lessons on Neuroscience and Leadership

Author and leadership expert Simon Sinek addressed the General Session at RIMS 2013 today with an inspiring keynote speech that looked at what makes good leaders and effective organizations so successful. But unlike a typical business presentation that relies on platitudes and buzzwords to state its case, Sinek turned to human biology to illustrate what motivates us and why we behave the way we do. According to Sinek, our actions boil down to the good feelings we get from four key chemicals in our body – endorphins, dopamine, seratonin and oxytocin – and that understanding these reactions may be useful for business.

For instance, endorphins provide a boost to complete physical tasks giving us the endurance to put in a little extra effort. Dopamine is why rewards make us feel so good.

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Seratonin inspires positive feelings of pride while oxytocin relates to generosity.

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These reactions are hardwired into us from the earliest days of primitive man and his search for food but they are still relevant in today’s business world as people still follow these instincts to achieve common goals. We basically traded life and death goals of the tribe for the business goals of our organizations.

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As a result, Sinek says that organizations need to understand that “business is not like a family, it is a family.” If leaders don’t understand these needs, people will not be motivated or loyal to their modern tribe. Even worse, if these chemicals are not balanced it creates stress in employees, which blocks oxytocin and its immune-boosting powers for instance, and actually makes employees sicker. “Our companies are murdering us, and murdering our children,” he said.

The key is to promote a work-life balance that isn’t only about time spent, but about about building quality relationships even within the organization, so that people will be inspired by their leaders to do the right thing, not for their own self-interests, but for the good of the group.

Companies in 2013 Are Less Prepared for Major Risks Than They Were in 2011

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Gloomy news: Companies across the world are now less prepared to deal with risks than they were two years ago. Even worse: Though companies have had nearly five years to respond to the global economic slowdown — which they cite as as the biggest risk to business — they are increasingly unable to confront the revenue problems it has created.

This is according to the 2013 Global Risk Management Survey released today at the RIMS 2013 Annual Conference & Exhibition by insurance broker Aon. To formulate its findings (displayed in the above chart), Aon compiled the “risk readiness” scores from companies’ responses to its survey and compared them to the results of its 2011 report.

“Risk readiness means a company has a comprehensive plan in place to address risks or has undertaken a formal review of those risks,” states the report. “In comparison with that of 2011, overall readiness for the top 10 risks has dropped by 7% to 59%. In fact, of the top 10 risks, all but business interruption has registered a decrease in overall readiness. Given the attention and scrutiny that risk management practices have received from stakeholders since the financial crisis, this is a disturbing trend and a bit surprising.

As noted, companies still don’t know how to navigate the economic slowdown.

Aon offers some advice: “Since concerns over the world’s economy will not go away soon, organizations need to embrace it for the long-term and from a global perspective. We are no longer sitting on an island by ourselves. What happens on the other side of the world can have a direct impact on every organization, whether it has international operations or not.”

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It isn’t just the international exposures that threaten revenue, however.

In another startling trend, companies are increasingly losing money due to regulatory and legislative changes. A staggering 54% of companies reported income loss (in the last 12 months) due to regulatory and legislative changes — a huge jump from 22% in 2011.

In addition to surveying companies and breaking down how they are responding to individual risks, Aon also analyzed how businesses are using risk management while creating strategy.

The short answer: They are not.

Only 22% of respondents consider “improved business strategy” to be one of the primary benefits of investing in risk management. While there has never been a time when risk management was heavily used to create strategy, this is actually a 1% dip from the 2011 report, in which 23% listed improved business strategy as a primary benefit.

Javier Gimeno, a professor of strategy at INSEAD, a business school in France and contributor to the report, highlighted the concern these findings raise. He notes that many of the top risks cited by companies are strategic in nature. And to deal with these types of threats, companies must re-think their strategy-formulating process. It must incorporate risk management.

“The practice in many companies is still sequential: strategy development comes first…and risk management takes strategy as a given and manages the ensuing risks,” he wrote. “That may lead to strategies that are not sufficiently flexible or adaptive. When strategic risk management is embedded as an integral part of the strategy process, the strategies can become more robust to uncertainty, and more flexible and exploratory.”

He concludes with some advice for companies that want to be better prepared for the 50 top risks (see chart below).

“Developing capabilities for strategic risk management by top management teams and boards should be an important priority in these uncertain times.”

Two New Chapters Announced at RIMS 2013

The Risk & Insurance Management Society has announced the formation of two new chapters — RIMS Peru and RIMS Australasia. These mark the 81st and 82nd chapters of the Society. The announcement was made today at the RIMS 2013 Annual Conference & Exhibition in Los Angeles.

RIMS now has more than 11,000 members, operating in over 60 countries. The Society’s 82Chapters are located in the United States (68), Canada (10), Japan, Mexico, Australia and Peru. In addition to having chapters in these countries, in the past year, RIMS has actively participated in conferences and hosted professional development workshops in Dubai, Panama, Tokyo, Mexico City, Venezuela, Bermuda, as well as several cities in Europe.

“Most companies today have some level of foreign exposure requiring risk professionals to think globally when analyzing threats and opportunities,” said RIMS President John Phelps. “While risk programs differ from organization to organization, expanding RIMS’ global presence with new chapters in these two countries makes it even easier for the Society to share its wealth of resources and knowledge while helping to establish a more uniformed approach to risk management.”

Eamonn Cunningham, president of RIMS Australasia Chapter said, “I have been a member of RIMS for more than 13 years and have benefited from its resources and participated in its conferences for even longer.  I’m thrilled to be able to bring these invaluable opportunities to the Australasia region’s community of risk and insurance professionals.”

David Saettone, president of RIMS Peru Chapter, said, “With the fifth largest population in all of the Americas and one of the largest business districts in South America, Lima is an ideal destination for RIMS to establish its presence in South America. We’re excited to be able to provide this centralized location for local risk professionals to connect and share ideas.”

As the need for and importance of risk management continues to grow, the reach of RIMS will continue to expand.

Countdown to RIMS ’13

In just two days, the RIMS 2013 Annual Conference & Exhibition will kick off in Los Angeles. Each year this event plays host to inspiring keynote speeches, educational sessions and countless opportunities for networking. And this year is no different — just better.

Some of the highlights of RIMS ’13 include:

  • Keynote speaker Simon Sinek, the author of Start with Why: How Great Leaders Inspire Everyone to Take Action and Ted Talk alumni.
  • Howie Mandel, who will give the crowd a few laughs during the conference finale Wednesday, April 24th at 2:15pm
  • The RIMS Thought Leader Theater, which will deliver more than 20 fast-paced, 25-minute topical presentations not offered at any other time during the conference
  • The RIMS Smart Bar, which will provide a place for attendees to learn about the latest hints and tips for engaging with the global risk community through social media
  • A series of 60-minute “power hours” offering educational sessions designed specifically for the adult learner
And of course, the staff of Risk Management will be on hand to deliver post after post — writing about the various sessions, events and people we will meet. So tune in here and through the various RIMS social media apps to keep up with the RIMS 2013 Annual Conference & Exhibition.
Here we go!