How do you become Chief Risk Officer?
“A couple of problem projects slowly drove Heijmans into the red around 2016. This led to difficulties with our financing. Fortunately, our financiers saw that practically all the other projects were financially healthy and placed their trust in us. They did demand us to take measures so a small number of poorly performing projects would not get us into trouble again.
For that reason, they decided to centralise management of Heijmans’ company risk profile. And the Executive Board asked me to become the Chief Risk Officer. First of all, we had to fence off the problem projects. As I knew the background and history, I arranged to meet the clients so we could finalise these projects. After that, I was given more time to handle the question ‘How can we increase our risk awareness in the organisation, starting with the intake of new projects?’”
Tell us, how do you that?
“It starts with a culture change. For instance, my task to increase risk awareness in the process of responding to a call for tender, led to resistance. ‘If risks are leading, you will never be able to take on projects again’ was an objection often heard within our tender clubs. I talked to them about that. Entrepreneurship means taking risks, but be aware of those risks and whether you are able to bear them, both on a project and on a company level. The latter is important, because in the past we purely assessed risks on a project level. We did not consider their effect on the total project portfolio and company.
Furthermore, at projects we were used to solving problems in a creative and ad hoc manner, saying ‘We will take care of that later, it will be fine’. And that was often the case. If that pays off you for a longer period of time, you become overconfident. This company culture led to highly opportunistic risk assessment.
On top of that, there was a social change taking place, one of hardening and overregulation, which influenced our relationship with clients. The contract became increasingly important and it was not a given anymore that you could manage business through the relationship.”
A cultural shift probably does not come easy?
“It requires a great deal from your organisation, in different areas. An example of this: escalating problems. Heijmans escalated issues with clients rather late. Understandable, as the term escalate has a negative ring to it. Especially in a company like Heijmans with many technical people, problem solvers. If you are unable to solve an issue, it is perceived as incompetence. While there is nothing wrong if you are unable to tackle a problem, but your boss can at that moment. If you escalate matters in time, you will not end up in the trenches.
To ensure that employees voice their worries earlier on, once a month, we discuss all projects from a risk-based point of view with the Executive Board and project teams. This way, we do not only get the information we need, we also ask the project manager: ‘What keeps you up at night?’ And: ‘What can we do to help you?’
This requires transparency. Rather scary, for instance, for management. Project managers are now not only talking with the management of their own business area, but also directly with the Executive Board. This also required a lot from the Board members. You see, you do not immediately condemn or discard the problem your colleague is worried about. Otherwise, he, and the rest of the organisation, will never report a problem again. A welcoming, transparent atmosphere is important, instil confidence.”