The Future of ERM: 12 Hidden, or Not So Hidden, Threats
Cultural Resistance to Risk Thinking
There are cultures inside companies that treat risk like a taboo subject. Not because anyone decided it should be that way, but because years of process, compliance, audits, and defensive behavior trained people to believe that anything related to risk is negative. If the standard created years ago framed risk conversations as corrective or punitive, then people will naturally defend against it. When a person is called a risk owner, the label alone creates tension. It sounds like they are being assigned blame for something they did not do. And once someone is told they must meet with ERM to discuss how they will mitigate or minimize or reduce a risk, they are already on the defensive. They walk into the room prepared to justify actions rather than explore uncertainties. They feel like they are meeting with someone who is ready to judge them. No one enjoys conversations that feel like that. So people withdraw and hide.
If risk is framed as an exercise in reduction or control, then of course people see it as negative. No one wants to spend time with someone who appears to be looking for flaws or mistakes. What we should be doing instead is collaborating. We should recognize that risk work is not about forcing processes on people but about supporting the people who make decisions. We help them gather meaningful information. Not all information, but information that provides insight into uncertainties and reveals signals and drivers that shape the future. We help them interpret what they see. We help them step into decisions with a clearer view. That does not guarantee every decision will be right, because the world changes too fast for that, but it does mean they move forward with both eyes open. Clear vision beats a blurry view every time. No one chooses to see the world through a foggy lens when clarity is possible.
The Roots of Resistance
In many companies there is an unwritten rule that says do not bring me problems. Most executives operate in an environment of pressure. Increase revenue. Increase visibility. Deliver growth. Raise shareholder value. Expand influence. Keep the momentum moving up and to the right. They focus on creating value because creating value feels more exciting than protecting value. A former CFO I worked with once said that a strong executive understands value creation and value protection, but the truth is that one is rewarded more often and more visibly than the other.
If someone told you that you could raise revenue from ten billion to eleven billion, you would find that idea appealing. If someone told you that you must reduce a five billion cost base down to four billion with fewer resources, you might feel miserable before you even start. One feels like opportunity. One feels like punishment. Most companies lean heavily on negative consequences. Provide less. Take away. Restrict more. Positive reinforcement is far less common.
People also fear being judged. They fear that speaking openly about uncertainty will be interpreted as incompetence. They fear that admitting what they do not know will slow their career. Society celebrates the person who succeeds after twenty failures, but no one celebrates the person who is still failing. We create myths about persistence and brilliance. Sometimes the person who succeeded on the twenty first try simply got lucky. Society does not want to hear that version of the story. So inside companies people hide. They avoid any label that feels like failure. They protect themselves because survival feels safer than honesty.
What Leadership Signals
Leadership behavior sets the tone for how risk is perceived. If a leader does not want to discuss risk, the team will not want to discuss it either. They read the facial expressions and hear the tone shift. They feel the tension when a risk topic lands on the table. If a leader claims risk matters but punishes candor, people become silent. They begin to distance themselves and allow someone else to speak first. They avoid accountability by creating so many participants that no one can pinpoint responsibility. Leaders don’t want to hear about trying to solve a risk that will take considerable amount of money. Especially when they are attempting to create 5%, 8%, 12% growth and risk discussions detract from the time to discuss how to make more money.
Often the behaviors that suppress open conversation are not subtle. They are visible to everyone. A raised eyebrow, a bored expression, arms crossed, a dismissive comment. When a leader treats risk as bad news, ERM becomes the bad news department. And who wants to spend time with the group that brings the dark cloud to the meeting.
Part of the issue is that ERM professionals have allowed themselves to operate inside that frame. If we know that leaders dislike downside conversations, then we should not cling to a framework that focuses only on downside. We should expand the narrative and shift from talking about outcomes to talking about decisions. We should position ourselves as partners who help illuminate uncertainties, reveal opportunities, and widen the field of view. Our value should come from helping decision makers think better, sooner, and with a broader lens.
The Cost of Silence
Burying risk always has a cost. Signals accumulate, conditions form, and maneuverability disappears long before the crisis arrives. Imagine a small crack forming inside a structure. At first it is almost too small to see. A hairline fracture, but a signal. If it is ignored, the crack grows and pressure builds. The structure weakens and then one day it fails and everyone is shocked, even though the early signs had been visible for years.
Weak signals are opportunities. They are warnings that still allow room for revision, deviation, or at least preparation. When those signals are suppressed, the organization trades early options for late consequences. Think about the 2008 Global Financial Crisis. Signals existed and warnings were present. But overconfidence and lax oversight turned signals into silence. When the collapse came, it was not because the signals were too faint but because leaders did not listen.
There is also an emotional toll when people know it is not safe to speak. It does not take long before they stop speaking to protect their standing. They fear the label of negativity or appearing pessimistic. They fear the consequences of surfacing something unpleasant. They want to be recognized as high performers, and they believe that bringing problems forward will make them look weak. Instead, they hide what they see, even when they know silence carries risk.
Decision portfolios become distorted and choices are made based on curated narratives rather than real insight. People begin to craft stories that sound clean because clean stories gain approval. Uncertainties are omitted, ambiguities are eliminated, and interpretations are softened. The result is a portfolio built on incomplete truths. Some organizations do not fail because the world was too complex but because no one felt safe enough to reveal the complexity.
History is full of examples where silence did more damage than complexity. Volkswagen. Boeing. Situations where concerns were raised yet kept quiet. When cultures punish honesty, the truth finds the darkest corners to hide in.
The Shape of Curiosity
Healthy curiosity is rarely found inside cultures that resist risk conversations. True curiosity is uncomfortable because it surfaces questions no one wants to answer. But when curiosity thrives, organizations become more agile. They see and anticipate more while adjusting before they are forced to adjust.
Curiosity looks like someone willing to take the contrarian view. It looks like the tenth person in the room asking the question no one wants to ask. It looks like someone connecting two unrelated signals and creating insight. It looks like someone interpreting uncertainty with humility rather than trying to prove they are the smartest in the room.
There is a difference between performing curiosity and living it. Many companies claim they encourage open dialogue, but the behavior does not match the message. Real curiosity looks like a leader who listens and genuinely wants the team to challenge ideas. It looks like a team that feels safe enough to say the uncomfortable thing. It looks like a culture where someone can admit they missed something and not fear punishment.
Psychological safety does not need academic language. Having comfort that if you speak up, you will not be punished is plain enough. The knowledge that mistakes will not define you and curiosity will not be punished is simple. But for curiosity to become cultural, leaders must model it. They must allow their own ideas to be challenged and admit their own uncertainties. They must acknowledge that success often comes from luck, timing, and the contribution of others, not just their own brilliance.
Curiosity seems to be inverse to ego. As the ego grows, curiosity starts to die. The circle is complete when ego creates the narrative that the only creativity which can be trusted is your own. But it thrives when leaders drop the performance and become human again.
Turning the River
Think of a river that flows freely. It feeds everything around it. It creates life. Ideas and conversations behave the same way. When the river branches, new life follows. That is what happens when curiosity spreads through a culture. But when the water is blocked, everything begins to dry out. Progress slows, the current becomes stagnant, and life disappears.
Cultures block the river when they punish honesty or encourage people to protect themselves. Once the river dries, bringing it back requires more than a workshop. It requires the consistent behavior of leaders who show that speaking honestly is not a trap. It requires routines that encourage exploration. It requires questions that challenge assumptions. It requires spaces where people can say what they see without fear.
Small changes matter. A leader who shares a mistake openly. A team member who asks a thoughtful question. A meeting where someone says what everyone else is thinking. These are signals the river is moving again.
The Message Beneath Everything
Cultural resistance to risk thinking has very little to do with tools. It has everything to do with trust. Risk thinking is not negative, it is stewardship. It is curiosity about what might come. It is openness to the pressures people feel and the uncertainties that shape decisions. It is the willingness to look ahead without pretending the path is certain.
An organization succeeds not because it avoids all mistakes but because it chooses to see the future with honest eyes. When cultures embrace uncertainty rather than fear it, decision making becomes clearer, faster, and more grounded. The goal is not simply to reduce or mitigate. The goal is to help people step into the future with meaningful information that strengthens their choices.
Success comes when curiosity becomes natural. When speaking up becomes safe. When truth finds daylight instead of shadows and when the river flows again.
If that can happen, cultural resistance fades. And risk thinking becomes what it always should have been. A way to see the world clearly and a way to help people make better decisions. A way to navigate an uncertain future with both eyes open looking upon the wonderful flowing river.
Let’s discuss how to keep your risk program moving forward without missing a beat. Click here to schedule a Discovery Session or use the Discovery Session button on my website.