Submitted by: Elena Yearly, CEO of EMY Consulting. Elena has a 20+-year history working with organizations in all aspects of figuring out their risk management strategies and what makes sense for them. She is your current Treasurer on the AFERM Board and has been an AFERM volunteer for over ten years. Her firm is an AFERM sponsor. And Elena loves putting jigsaw puzzles together!
“Imagine a jigsaw puzzle with some missing pieces. Initially you might not have a clear idea of the final picture, so you don’t know what the missing pieces look like…but as you assemble the puzzle piece by piece, you get a sense of the complete picture.”
Taken from the Serendipity Mindset, Christian Busch, PhD, pg. 107
It is February 2020. I am relaxing in the beachside resort town of Siesta Keys, Florida. I was invited to stay with a friend who was renting a house and she offered up a five-day stay for me for some much-needed rest and relaxation. She picks me up from the airport and we journey to the beachside rental. We get to the location that sits on a waterfront property. Every room offers the peaceful serenity of a sun-kissed beach with waves going back and forth. Little did I know at that time that my life would change going forward. No…not from the initial throes of the pandemic that hit less than a month later. It would be in the form of a 1000-piece jigsaw puzzle half completed on a table in the covered porch of this resort! It would eventually lead me to taking jigsaw puzzles beyond their traditional and intended role. Here is what I landed upon: it was while working on several 500 and 1000+ piece puzzles since 2020 that I began to think about, and uncovered, a unique approach that shows the ‘working relationship’ between the ‘art of puzzling’ and ERM. Just as each puzzle tells a unique story, the same can be said for ERM. Let me explain:
As a start, when you think of ERM and the efforts you have undertaken within your federal, state, or local entity or organization, what first comes to mind? Consider how much needs to come together and what makes for a successful ERM effort. Consider the varied risk-based roles and responsibilities of Executive and Senior Leaders, Risk Owners, Risk Advocates and Risk Champions, Subject Matter E
xperts, Management and Staff, and those external providers who support the implementation of the ERM Program within an entity. All have such a valuable and key role to play today, tomorrow, and well into the future. Plus, risks can emerge both from internal and external sources. The risk climate is also changing constantly which results in the fact that ERM is fluid and we, as risk management professionals, have to flex and adjust accordingly. It takes coordination, organization, and focus. It takes a visionary. It takes thinking strategically. It takes connecting the dots: say between strategy, risk management, and internal controls. Just as we connect the dots as we put together a challenging puzzle, well here we are connecting the dots in our ERM efforts.
We have to take into account the various elements inherent in a successful ERM Program. Consider the elements depicted in the figure below taken from Page 21 of the Fall, 2022 Update of the ERM Playbook. Think about every single activity that is embedded within this illustrative ERM model.
Think further about the key principles around ERM success, advocated within the ERM Playbook, and the various ERM frameworks at our disposal domestically and globally. Elements and principles center around the tailored ERM efforts we undertake that tend to be related to organizational governance, risk ownership, risk decision making, culture, the adoption of a risk appetite, determining risk tolerances that make sense for you, and the value of everyone’s involvement in the risk identification process. It is through the risk thought leadership from various sources, such as those depicted below, that help us put our ERM puzzle together.
Think about it. When you peel back that onion, ERM can definitely be construed as a huge puzzle. Not a puzzle in the sense that it could not be figured out how the pieces actually fit together, but from the standpoint that ERM is actually like that puzzle that eventually comes together. Notice the unique and interesting parallel between when you are working on a jigsaw puzzle, and how it aligns with the success factors that every organization aspiring to implement a successful ERM program must have in place and needs to demonstrate.
It takes time to put a jigsaw puzzle together. There are unexpected interruptions. The same holds true when you consider the ERM journey. As we have all uncovered, ERM is not an overnight sensation. It takes time to evolve within any government agency or state and local organization.
- It takes patience, the same patience needed when you are putting a jigsaw puzzle together.
- It takes creativity and overcoming challenges – the same as with a puzzle when you are trying to locate that missing piece.
- It takes persistence in working up and the goal to completing that jigsaw puzzle just as it takes persistence as the ERM process comes together based on the goals that we set for maturity our ERM programs over time.
A simple internet search reveals that words like ‘imaginative, goal oriented, meditative, seeking challenges, inclined to problem-solving, thinking visually’ are key descriptors of those people who like to work on jigsaw puzzles. Well, couldn’t the same hold true for those of us heavily involved in the ERM process? These are the same traits that describe those of us who lead the ERM charge within organizations when we are structuring an effective ERM Program. In closing, I would like to leave you with advice on effective ERM implementation. These are a byproduct of lessons learned from the jigsaw puzzle world that now have been tailored to ERM and how you can address your ERM journey in a practical way:
- Keep your eye on the ball with a beeline focus on your ERM goals and what you seek to accomplish in your tailored ERM Program just as you do with a jigsaw puzzle.
- See the big picture and the steps in between and take it one step at a time just as you would do in a puzzle situation.
- Do not get overwhelmed by the ERM process. Recognize that you will not complete your ERM efforts in one sitting. Imagine that 1000+ piece puzzle. Although it may seem like during some days with ERM that there are so many moving parts that may not all fit together, it is important to keep in mind that there are many more pieces in a 1000+ puzzle than what we encounter in implementing an effective ERM program. No reason to be concerned. Make the ERM journey real for you – just like a puzzle – one piece or ERM element at a time! Be patient as eventually your ERM puzzle pieces will come together.
Thank you for going on this ERM journey with me. I hope this article provoked some thought about your ERM process and how to best make it come together. Please do not hesitate to reach out to me with your ERM thoughts and questions
Elena Yearly at eyearly@emyconsulting.biz or (703) 943-8129.
References for Article Graphics:
- Globe puzzle graphic – courtesy of the internet, author not identified.
- Puzzle pieces graphic – courtesy of the internet, author not identified.
- Figure 3 – Illustrative Example of ERM Model – Enterprise Risk Management Playbook (Fall 2022 Update) (doi.gov), page 21.
- AFERM Practice Guide – AFERM Releases Initial Federal ERM Areas of Practice Guidance – AFERM – Association for Federal Enterprise Risk Management
- Playbook – Enterprise Risk Management for the U.S. Federal Government, Fall, 2022 Update – – Enterprise Risk Management Playbook (Fall 2022 Update) (doi.gov), cover page.
- Government Accountability Office (GAO) – courtesy of the internet, author not identified front of GAO building picture. U.S. Government Accountability Office (U.S. GAO)
- GAO Green Book Cube – GAO-14-704G, STANDARDS FOR INTERNAL CONTROL IN THE FEDERAL GOVERNMENT, page 2.
- RIMS – Risk Management Community, Education, and Resources | RIMS
- OMB – Office of Management and Budget | The White House
- ISO 31000 Risk Management – ISO – ISO 31000 — Risk management