How do risk managers become influential?

Description

"In this study, we examine transformations in the influence of risk managers in two large UK banks over a period of five years. Our analysis highlights that a process we term toolmaking, whereby experts adopt, adjust, and reconfigure tools that embody their expertise, is central to the way in which the risk managers in our study attempt to gather influence in their organizations. Based on our longitudinal field study, we identify two dimensions that help to explain the organizational influence of experts: their ability to (a) incorporate their expertise into highly communicable tools and (b) develop a personal involvement in the deployment and interpretation of those tools in important decision-making forums. Based on the different combinations of these two processes, we distinguish analytically among four clusters of actions and tools--those of the compliance expert, the technical champion, the trusted advisor, and the engaged toolmake--and explain the dynamics of expert influence as risk managers adopt different practices. Our empirical findings and theoretical framework contribute to our understanding of the nature of expert influence and how risk managers may become influential."

Description

"This paper, based on a five-year longitudinal study at two UK-based banks, documents and analyzes the practices used by risk managers as they aim to gather and establish influence in their organizations. Specifically, we examine how influence-seeking risk managers (1) establish and maintain interpersonal connections with decision makers and how they (2) adopt, deploy, and reconfigure tools--practices that we define collectively as toolmaking. Using prior literature and our empirical observations, we distinguish between influence activities to which toolmaking was not central, and those to which toolmaking was important. As for the influence activities that imply toolmaking, we can outline the contours of three modes of operation, which describe experts operating as Compliance Experts, Engaged Toolmakers, or Technical Champions, depending on the communicability of the tools and on the extent to which the experts are involved in practices related to those tools. Our study contributes to the accounting and management literature on influence-gathering, underlining that toolmaking plays a vital role in explaining how functional experts may compete in the intraorganizational marketplace for influential ideas and the attention of decision makers. Specifically, as risk management becomes more tool-driven and toolmaking may become more prevalent, our study provides a more nuanced understanding of the nature and consequences of risk managers' influence activities. An explicit focus on toolmaking extends accounting research that has hitherto focused attention on the structural arrangements and interpersonal connections when explaining the emergence of the influential financial expert."

Subjects

Series Statement

• Working paper / Harvard Business School -- 11-068

Other Editions

• How do risk managers become influential?: a field study in two financial institutionsHarvard Business School2013-01-01
• How do risk managers become influential?Harvard Business School2013-01-01
• How do risk managers become influential?Harvard Business School2013-01-01
• How do risk managers become influential?Harvard Business School2013-01-01