Why SMARTER Risk Management?
By John Hurlock, President and CEO of SMARTER Risk Management
I sometimes get questions as to why we chose the name SMARTER risk management for our consulting firm. Sometimes I respond with a bit of humor at least to me by saying “It’s not just a clever name, you know, the letters actually stand for something”, and other times I just launch into the meaning of SMARTER and how to apply it to risk management. In either case, this question exposes the fact that there is a history to the name/acronym, and it means a great deal to me, and hopefully to the people and organizations that use the SMARTER Risk Management approach.
The original concept, which goes back almost 15 years, came about because I was struggling to explain and apply the COSO concept (cube) to the risk management practice we had formed as a part of Metavante Business Consulting. It just seemed that the cube, while very elegantly designed, didn’t filter down to the real world of day to day risk management. In reality, risk management is not some crisp and shiny thing that people use and then write academic papers on. To me, risk management is about living in the real world; chaotic, noisy, unpredictable and, most important of all, human. Effective risk management allows us to stay alive, interact with others, and hopefully avoid pitfalls; but at the very least know how to react when that bad thing happens. Above all, risk management is a very personal thing. We all deal with risk differently and it helps to have a set of guidelines to use and fall back on in times of stress.
So, with my colleagues and friends we came up with an acronym and an approach that has proven to be useful and memorable. The key to a good acronym is that people remember it and know what it stands for. The original acronym was “SMART” Subject, Manifestation, Actions, Results, Testing. We added the superlative “ER” later to capture the concepts of Expectations and Review, effectively “SMARTER”. I won’t go into the specific meanings here but encourage you to look on our website for how they are defined.
One of our early clients helped further this concept when they linked Subject to Activities and came up with Key Risk Activities. Thanks to Chris and Vu, we made the shift from Key Risk Indicators (KRI’s) to Key Risk Activities (KRA’s). At the time, everyone was compiling a list of KRI’s and these were being applied to scorecards to determine a risk rating for the organization. The trouble with KRI’s is that they need to be linked to an activity, thus moving beyond risk acknowledgment and instead risk management. Or, better yet, an activity should be linked to one or several KRI’s. The activity is where the risk comes into existence and occasionally turns into an event. The uncertain future becomes the certain present. This is where the humanness gets introduced: what do we do? why do we do it? and what can go wrong? All of these are embedded in KRA’s.
In 2012 we stepped out from under the wing of Sheshunoff Consulting. This new consulting firm had to be named SMARTER risk management because SMARTER represents our approach to understanding, creating, and bringing to life a common sense and understandable risk management system. With this approach, this critical thinking process, we are able to build the kind of custom program you need for managing your overall risk and your various individual risk management activities.
SMARTER has grown from being a way to communicate concepts of risk to a tool used for critically thinking about risk and effectively responding when the “bad day” happens. Our goal of helping clients build and manage their own risk programs has been achieved time and time again. And it all began with a struggle to communicate COSO to the people who were charged with managing risk…and to me, we are smarter.
President of SMARTER Risk Management
In this arena John is focused on credit risk, interest rate risk, liquidity risk, and strategic risk. Prior to starting SMARTER Risk Management, John was the National Director for Enterprise Risk Management and Compliance for Sheshunoff Consulting + Solutions. And prior to Sheshunoff, John was the Director of Integrated Risk Management Consulting Services for Metavante, a $2 billion technology firm focused on financial institutions.
John has 30 years of experience in the financial institutions arena. His first fifteen years were spent working for financial institution of various size and complexity, and has spent the last eleven plus years in the business consulting arena. During John’s banking career, he worked in several areas of banking including credit, treasury services and operations.
During John’s consulting career he has worked with domestic and international financial institutions ranging in size from the community bank market to a US$1 trillion international financial institutions. He has assisted banks as they have worked through regulatory orders and issues, and been heavily involved in the roll out of advanced risk analytics including risk-based capital, the Basel II Accord and stress.
John has spoken and presented courses throughout the United States, Europe, in the Middle East and Africa. In 2008 he conducted a workshop in Moscow, and has presented a credit risk analytic course for 11 banks in the Middle East. In addition, he has led an operational risk program in South Africa and has conducted a Board of Directors corporate governance and risk management program for international banks.
John has an undergraduate degree in Economics and an MBA from the University of Wisconsin. He is currently an adjunct professor for Webster University, teaching in their MBA program. He teaches Investment, Capital Markets and Management. John has also authorized several articles and white papers and is a sought after speaker at banking conferences.
A Sample of Our Experts
With over 35 years of financial services experience. John has led major projects in national and international financial institutions. He has significant experience in implementing organizational, process and product design, merger and consolidation, information technology, and other types of change in both the commercial and trust organizations of financial institutions.
John worked with several national consulting firms, as a managing director, practice manager, and senior consultant. John has led projects encompassing corporate and retail services, operations, lending, trust, data processing, and telecommunications. He has also consulted on engagements encompassing personal, corporate, and institutional trust administration, as well as the investment function for trust departments of varying size. His consulting efforts have included re-engineering all aspects of the trust business line, as well as the marketing financial and executive functions.
The National Director for the Enterprise Risk Management Practice at SMARTER Risk Management. She has over 20 years of experience in financial services and consulting, with a specialization in performance improvement and relationship management. Her consulting core competencies include: profitability measurement, operational improvement, process standardization, project management, systems utilization, and budgeting and planning.
Before joining SMARTER Risk Management, Kelly was the practice Manager for Enterprise Risk Management at Sheshunoff Consulting + Solutions. And prior to that, she served as Performance Management implementation Manager at SunGard Risk and Performance (formerly BancWare). At SunGard she led a team of consultants in the implementation of profitability, budgeting, and relationship pricing solutions for financial institutions ranging in assets from $1 billion to over $200 billion. She directed all segments of the implementation life cycle, including scope validation, project planning, resourcing, budgeting, and project management.
A former Engagement Manager for Sheshunoff Consulting + Solutions. Ty has over 25 years of financial services experience both in consulting and bank management. As part of the Consulting Solutions Group, he worked with financial institutions to identify areas to increase profitability, productivity, and efficiency in bank operations. Managing projects and directing teams are his strengths in providing high performance solutions for clients.
During his career Ty has had extensive experience in consulting projects for regional, community banks and credit unions nationwide, ranging from $200 million to $20 billion is asset size. Areas of expertise include: Strategic Planning, Management Consulting, Executive Coaching, Project Management, Organization Alignment, Lending (Commercial, Consumer, Mortgage, Credit Administration, and Loan operations), Retail Banking, Technology, and Risk Management.