From corporate culture to decision making, every company is as unique and diverse as the people within it. On February 11th, Caterpillar’s Rod Richards gave a thought-provoking presentation on enterprise risk management and specifically how Caterpillar’s distinctive organizational structure sets the company up for proper decision making and mission achievement.
Richards is not only a risk manager but also a retired US Marine. He confirmed that his military experience helped him develop crucial skills like decisiveness. These traits continue to benefit him in his current position as one of Caterpillar’s risk managers. Many of us know Caterpillar from the massive amber excavators and other heavy machinery equipment seen on construction job sites. It makes sense then that the main industries that Caterpillar is involved in are mining, construction, and energy transportation.
However, every company needs to be involved in the risk management industry to realize its goals. This is where Richards comes in. He describes Caterpillar’s enterprise risk management strategy as a “bottoms up story.” The risk managers heavily rely on information provided by the employees who work closely with large exposures. One of their approaches is to continually collect input from workers who operate and work alongside the company’s assets on a daily basis. This allows Caterpillar to identify their largest risks that may not be obvious at a corporate level. From there, they work their way up to the CEO to design a truly unique risk plan.
Richards emphasized that a risk manager does not need a single particular strength to be successful; however, it’s important to be able to recognize personal weaknesses given that they will surface eventually in the career.
Another important takeaway was that risk management is a journey–it is dynamic, and changes with respect to innumerable variables. In enterprise risk management, it is imperative to be re-evaluating past decisions from different perspectives. The continual analysis can help ensure that strategic decisions of the past will facilitate the company’s success in the future.