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Risk is much more around resiliency.
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It's much more around opportunities
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and disruption and leveraging disruption.
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(whimsical music)
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Thinking a little bit about your learnings as CRO,
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apply it to the clients that I work with now,
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in terms of health care CROs,
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what would you say to them?
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For health care clients coming out
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of the historical compliance focus
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has been not probably the most flexible of functions.
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And I think risk now needs to look at things
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not just as a way to say no,
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as a way to always be looking at the downside-
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Yeah.
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But as a way to really bring some degree
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of flexibility into it,
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to shine a light of transparency into,
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"Hey, here's what the potential downsides could be.
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Here's what the upsides could be.
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Here's how we might wanna think about those trade-offs."
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And to think about that differently
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for different risk topics.
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So much is about ruthless prioritization now.
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You can't put a stake in the ground on everything.
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And my advice would be, know what you're protecting,
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know what the disruptions are,
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know what the opportunities are.
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Choose your battles.
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Choose where to really spend the time
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with senior executives engaging
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versus where you can leverage other parts
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of the organization where you can leverage tech.
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And maybe those aren't places
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you wanna be fighting all the time.
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And I think that's also
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where enterprise risk management comes in,
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in the sense of you have that connectivity
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because the risks of today are very connected
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and MFN, IRA that
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pharmaceutical companies at least had to deal with.
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Yeah.
You needed
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that cross-functional connectivity.
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100%.
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And the way I think of ERM, though, is,
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let's not think of it purely as a function,
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because historically, ERM created a lot of reports.
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Yeah.
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They did a lot of mandatory reporting, right?
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And good reporting.
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But ERM is a capability of managing risk
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on an enterprise level.
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Right.
I'm working with advising
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some health care companies now
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about how to think about resiliency and risk management as,
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what does it mean to be an enterprise-level function
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as opposed to just a function called "ERM"?
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And it's a different mindset-
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It is.
And a different capability
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than historically has been within a lot of ERM groups.
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It's true also because you said prioritizing,
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because with a plethora of analytics and digital,
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I mean, you could be getting hit with a ton of risks
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that you could spend a lot of time
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really chasing down things
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that don't actually materially impact the business.
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100%.
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The first part, though, is understanding
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what are the crown jewels of the business?
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What do we actually need to protect?
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Yeah. So what would you say to CROs?
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So that's your learnings, but you know,
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if you had to give them some advice going forward?
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A couple things.
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One, ruthlessly focus on talent.
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And the modern risk organization
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requires a different kind of talent.
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Part of that is because of the opportunities of technology,
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and bringing that mindset
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into a risk organization is a challenge.
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You have to attract people into a place
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that historically maybe doesn't attract folks
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who think on an enterprise level,
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who have that technology fluidity,
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and can use those tools.
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Technology creates a lot of signals,
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so the talent that we need in risk now
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is how do you pattern-recognize
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to put all those signals together,
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then amplify them and figure out
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what it is that really, really matters.
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The second bit of advice I would have
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is for CROs to measure themselves
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on the relationships that they build,
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the tables they sit at.
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Are they sitting at the right table?
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For core strategic decisions
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that an organization is going through,
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is the business there?
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Is strategy there?
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But also, is risk there?
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And can you come at it and be sought out,
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not just for your downside thinking,
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but for your disruption thinking?
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And so, being critical of your own careers
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and the relationships you're building
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is an important part, I think, of the modern CRO.
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I agree.
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I also think that from a talent perspective,
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the ability to be at those tables means you need
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to have certain communication skills
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and certain facilitation skills
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because there will be always trade-offs
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when you try to manage risk,
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and there will be different perspectives.
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The word "enterprise," right, and what does that mean?
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Most organizations, a lot of health care organizations,
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are very siloed,
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and so the number of people that can effectively work
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across siloed is somewhat limited.
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That's a really scarce talent set.
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The more risk can be that,
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the more they can deal with,
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way back what we talked about in the beginning,
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the interconnectedness of the issues
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that are facing organizations today.
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But they can also build those relationships
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in an honest broker way,
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bringing people together to solve problems
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rather than creating more silos.
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So one parting thought?
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More and more, we're not just talking about risk,
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we're talking about disruption,
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we're talking about resiliency.
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Resiliency is a topic that is long time embedded within IT
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is now elevating up to an enterprise level.
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Risk is natural to be at that table,
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to be at the resiliency table.
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It's not just a when, you know, or an if.
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It's how many times will they get hit?
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What kinds of disruptions,
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what kind of crises will they go through?
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Risk, because of the cross-functional nature
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of the role they play, can do an amazing job
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at bringing people together,
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so owning that resiliency topic
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is a natural place for risk to evolve into.
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(soft music)