How risk leadership leads to better, more rational decisions
Authors:
- Bhavik Modi, Senior Director, Innovation and Digital Transformation at BTS
- Dr. Annette Hofmann, Director of the Lindner Center for Insurance and Risk Management at the University of Cincinnati, author of The 10 Commandments of Risk Leadership, and Editor-in-Chief of the Risk Management Insurance Review (RMIR).
Dr. Annette Hofmann is a researcher, author, and leading expert in the field of organizational risk. In this interview with Bhavik Modi, Senior Director, BTS, Dr. Hofmann explains how moving beyond a traditional approach to risk and developing risk leadership competence can help companies become more resilient and profitable—and may even save lives.Bhavik Modi: Dr. Hofmann, I’ve been fascinated to explore your research into risk in relation to the healthcare and insurance markets, and to industry in general. Under your leadership as director, the Lindner Center for Insurance and Risk Management is doing fantastic work in researching and collaborating with industry. BTS is excited to be partnering with the center on a new course based on your research. Thank you for agreeing to discuss your insights with me.Modi: I’d like to start with defining terms. Organizations have traditionally focused on risk management. How is this different from risk leadership?Dr. Annette Hofmann: Speaking specifically about the insurance industry, risk professionals are typically trained to think in terms of established concepts of coverage—additional insureds, medical payments, etc. They use risk maps or ratings to classify different risks and then evaluate them to find an appropriate risk-management technique. They focus on the mechanics, the quantitative aspects, of managing risk.Risk leadership addresses not just the quantitative but also the qualitative aspects of dealing with risk. This requires risk literacy. Understanding individual risk perception, risk aversion, risk perception-related behavior, and how emotions respond to risk and the cognitive biases that result is crucial to developing the risk literacy that enables better decision-making. This understanding is especially important for leaders, as their decisions have greater consequences. Risk leadership also requires communicating about risk, providing direction and guiding the company through tough times by coordinating efforts to deal with major risk exposures, anticipating opportunities to avoid risks, and implementing a risk-related strategy to ensure long-term success.Modi: Often, risk leadership is associated with the insurance or actuarial professions. How can this concept be applied to organizations in other industries?Hofmann: Many new titles have emerged in the past decade—Chief Risk Officer (CRO), Director of Risk Management, Vice President Risk Services—demonstrating a broad recognition that risk management deserves to be a top priority. The challenge is to move from competence in risk management to true risk leadership.In The Leader’s Brain, Wharton Neuroscience Professor Michael Platt describes how key areas in our brain work and how insights from this can be used to teach us how to develop better leadership abilities. He writes that while it’s difficult to train people in some areas, such as ethical decision-making, improvements in risk literacy are relatively easy to accomplish. The task consists mainly of acquiring knowledge about the risk-related biases our brains are commonly exposed to and gaining insights into how these biases can be avoided. Understanding the hidden forces that drive our decision-making processes under risk and uncertainty, we can be trained to make more rational decisions.Modi: What is the “uncommon sense” when it comes to risk leadership? What behaviors are well understood but often not put into practice? Or which behaviors are counterintuitive to how we would traditionally think and work?Hofmann: Managers are often seen as having sophisticated information-processing capability, as being able to make rational risk-related decisions based on economic incentives and the fullest available range of information. But managers are human beings, and like all of us, prone to biases and cognitive mistakes when they interpret risk-related information. These mistakes, together with emotions, hinder the objectivity of their decisions, which ultimately may hurt the financial survival of their firms.For example, the lack of objectivity prevents managers from identifying and taking into account secondary risk effects, which is when avoiding or trying to mitigate one risk creates another risk. Risk leadership means not only seeing the potential for secondary risk but also communicating throughout the organization how this is influencing the decision-making process.Consider the case of a U.S. manufacturer that recently experienced a small explosion leading to worker injuries. The company decided, following pressure from employees, to stop producing the part that was responsible for the explosion. Consequently, the part is now being imported from a Chinese supplier. Was this a wise decision? Well, the risk of another explosion is avoided, but now there is a secondary risk: the imported part could be defective; it might be delivered late or not at all. The decision to stop producing the part now creates supply chain risk.Good risk communication, letting employees know about the very small risk of explosion and the firm’s efforts to prevent a recurrence while continuing to produce the part, might have been a superior strategy for the company.Modi: How much of risk leadership is preventive versus reactive? And what are the consequences of poor risk leadership in a reactive or preventive situation?Hofmann: When it comes to reactions, one of the best illustrations of poor risk leadership can be found in the behavior of government officials following the terrorist attacks of September 11, 2001, killing almost 3,000 people.Officials did not provide the public with information about this type of risk that may have headed off a misguided reaction. After 9/11, many people used a car to get to another city or location far from their home rather than taking an airplane. Because driving is so much more dangerous than flying, this switch resulted in an estimated 1,600 more fatalities in the U.S. in the year following 9/11 than would have occurred if people had continued with their previous plans and patterns of travel. Our ability to make decisions based on factual probability data is often influenced by our fears and emotions following big events like the terrorist attacks, and policymakers did not address this effect by communicating potential second-order risk effects to the public.When it comes to preventive risk leadership, people often neglect the potential occurrence of natural disasters by adjusting their subjective probability judgments.People tend to prefer insuring against a high-probability-low-consequence risk such as a bicycle theft, over a low-probability-high-consequence risk, such as a flood. They purchase add-on coverage to the homeowner's insurance policy to cover the risk of bicycle theft rather than covering the risk of loss due to flooding.Studies of insurance demand suggest that individuals tend to ignore or undervalue low probability events.However, after a catastrophe occurs, people suddenly think this will happen again soon and then decide to purchase coverage, which according to probability they are less likely to need the following year. A preventive risk leadership approach would be to inform people about this misguided behavioral pattern and incentivize them to purchase catastrophe insurance before something happens.Modi: It’s clear that developing risk leadership requires a dramatic shift in thinking, including a recognition that, as you say in your book, we are not rational in the face of risk. Change is hard. Why is it worth it for organizations to make this change?Hofmann: Risk leadership enables organizations to identify, and therefore eliminate, the cognitive biases that lead to bad decisions. This needs training and I am happy to help – but of course I am human and therefore my decisions are also far from perfect. Training in risk leadership will lead to better decisions and better communication of those decisions, and ultimately to more profitability and greater long-term success of a company.
Related content
Related content
You can't predict the future. You can be disciplined about how you face it.
That's where Future Storming comes in. Future Storming is a process for looking at the trends and signals already visible in the market, understanding how those forces connect, and thinking more clearly about where they may lead.
Recently, we've been applying that lens to talent strategy, running Future Storming sessions with talent leaders across industries to understand which forces are already reshaping how organizations find, develop, and retain the people they need. When you look across those conversations, one thing is hard to miss: AI runs through almost all of the most significant trends, and not as a future scenario. It's already reworking the talent systems most organizations have leaned on for years, often quietly, and often faster than leadership teams have had time to respond.
From these sessions, five high-likelihood, high-impact shifts have emerged as the ones every talent leader needs to be watching right now. What follows is what each of them may mean for your organization.
1. The frameworks most organizations use to define great leadership were built for a different era
Skills and competency models describe work that no longer exists in many roles or that AI now performs alongside, or instead of, humans. The gap between what organizations say they're selecting and developing for, and what the work actually requires, is widening quietly.
This creates a real problem. Organizations that don't redefine what great looks like now will be developing the wrong people for the wrong future optimizing for capabilities that are becoming less predictive while under-investing in the ones that matter most.
- Rebuild leadership profiles from a future-back perspective, starting with where the business is heading, not where it has been.
- Focus on the distinctly human capabilities AI cannot replicate judgment in ambiguous conditions, relational intelligence, ethical reasoning, the ability to set direction when there is no precedent.
- Increase the use of behavioral observation in selection and development. It's the only methodology that shows how someone actually thinks and decides under real pressure.
The signal worth chasing isn't on a resume, it's in the room in how someone handles a real situation, under genuine pressure. It's the only place where someone can't prepare their way out of being themselves.
2. Human differentiators are the last mile AI cannot close
Judgment. Empathy. Creativity. The ability to navigate genuine ambiguity. These are increasingly what separates human contribution from AI output and they're precisely the things most talent systems have always found hardest to measure.
For a long time, organizations could afford to treat these as qualities that would emerge naturally with experience. That's no longer an option. The human differentiators are becoming the job. And most organizations still aren't measuring them well.
The methods exist behavioral assessment, simulation, structured observation. And AI is now making them accessible at scale in ways that simply weren't possible before. The question isn't whether to use them. It's how to deploy them thoughtfully, with the governance and transparency that -stakes talent decisions require.
- AI-powered behavioral observation that surfaces how people actually perform in the flow of work, (i.e. judgement, decision-making, adaptability) not self-report
- Assessment that evaluated how people work with AI, not just without it because that's increasingly what the role looks like
- Simulation-based approaches that reveal thinking in action - the kind of evidence no credential or output can provide
3. The talent pipeline is broken
AI is displacing the early-career work that has traditionally served as the on-ramp into organizational life. Those tasks once gave emerging employees something more valuable than work product. They gave them foundational experiences, relationships, and judgment. The kind of judgment that eventually grows into leadership.
The impact won't show up immediately. That's exactly what makes it worth paying attention to now. Within three to six years, benches will thin and succession pipelines will require far more intentional investment. Organizations will find themselves asking why their internal talent isn't developing the way it used to.
The organizations that get ahead of this have a real opportunity to build something more deliberate, more equitable, and better suited to the capabilities the future actually requires.
- Invest in real, simulation-based experiences, putting emerging leaders into the decisions and pressures that build genuine organizational judgment, not just task exposure.
- Redefine what early-career development is, building toward the capabilities the future requires, not the ones the old job description described.
- Build feedback into the flow of work. AI behavioral observation and practice AI role plays make continuous development possible at scale. The experience that used to happen informally has to be designed now.
4. People need to re-skill faster than any development model was built to support
People need to reskill faster than any development model was built to support. Most organizational development infrastructure was built around a longer, more stable arc of skill acquisition. AI is compressing that arc significantly.
The implication isn't just that training needs to be faster. It's that the whole architecture of how organizations identify, develop, and deploy talent needs to be built for continuous recalibration not periodic refresh.
- Prioritize adaptability and learning agility over static expertise. The ability to acquire new capabilities quickly matters more than the specific capabilities someone holds today.
- Treat reskilling as a continuous organizational process, not an episodic program.
5. AI is absorbing leadership work and culture is losing it's anchor
This is the shift that's easiest to underestimate, and hardest to recover from once it arrives.
Culture is what people see leaders do. The behaviors leaders model how they make decisions, how they show up in hard moments, what they choose to reward and what they let go are how organizational culture gets transmitted. It doesn't travel through stated values. It travels through visible human behavior.
AI is absorbing the work that used to make leaders visible as humans making choices. Performance reviews written by AI. Communications drafted by AI. Coaching conversations mediated by AI. When the distinctly human work disappears, so does the signal. People don't know what to watch anymore. And culture which depends on that watching starts to fray.
The organizations that navigate this well won't be the ones that use less AI, they'll be the ones most intentional about which leadership behaviors remain visibly human, and why.
The behaviors that held culture together need to be rebuilt around what humans uniquely contribute now and that starts with getting the success profile right. That's exactly what the Future Ready Profile is built for.
Strengthen empathy-centered leadership capabilities. The human dimensions of leadership matter more, not less, as AI takes on more of the technical work.
- Strengthen empathy-centered leadership capabilities. The human dimensions of leadership matter more, not less, as AI takes on more of the technical work.
- Reinforce organizational purpose and human-centered culture as anchors.
- Treat culture as something you design, not something you inherit.
What this means
The organizations that navigate this well won't be the ones that adopted AI fastest, they'll be the ones that invested just as deliberately in the human systems around it.
These five shifts aren't warnings. They're design problems, and design problems have answers. The talent systems that come out of this moment can be more intentional, more equitable, and more fit for purpose than anything we've built before.
At BTS, this is the work we're doing every day. If you'd like to think through what any of it means for your organization, we’d love to talk.
The thinking in this article was shapped by Future Storming sessions, including a SIOP 2026 workshop, and by ongoing conversations with talent leaders navigating these shifts in real time.
Hace unos meses terminé una sesión con un equipo de ejecutivos comerciales de una institución financiera mediana. Dos días intensos: cómo prospectar, cómo estructurar conversaciones centradas en el cliente, cómo crear valor en cada interacción. El grupo salió inspirado del taller.
Tres semanas después le pregunté a uno de los mejores participantes sobre cómo le había ido aplicando las nuevas herramientas. Me miró un segundo y me dijo, con total honestidad:
“La verdad... la semana siguiente fue igual que siempre, volví al viejo sistema”
El entrenamiento de capacidades es necesario. Pero sin una cultura comercial que lo sostenga, es un esfuerzo poco rentable para las empresas.
1. Las capacidades sin contexto no sobreviven al día a día
Un ejecutivo de ventas puede salir de un taller sabiendo exactamente qué preguntar, cómo estructurar una conversación de valor, cómo posicionarse como asesor estratégico en lugar de vendedor de productos. La semana siguiente, el peso de las métricas de corto plazo, la presión por resultados y las urgencias del día a día terminan arrastrándolos de vuelta a la rutina de siempre.
McKinsey (2024) encontró que más del 70% de las iniciativas de transformación comercial no logran sus objetivos — y la principal causa no es el diseño del programa, sino la falta de condiciones organizacionales para sostener los nuevos comportamientos.
El problema no es el taller. Es lo que existe o no existe en la realidad de la estructura comercial.
2. El cambio requiere alinear seis pilares
Lo que diferencia a las empresas que realmente transforman su modelo comercial de las que solo capacitan, está relacionado con seis pilares que operan simultáneamente.
1. Patrocinio de la alta dirección que empodera en lugar de solo exigir
2. Disciplina en gestión de cuentas/clientes estratégicos, con metodología y seguimiento
3. Conversaciones centradas en el cliente, no en el portafolio de productos
4. Cada interacción con relevancia estratégica, preparadapara crear valor medible
5. Nuevos comportamientos integrados al ritmo operativodiario y la cadencia del negocio
6. Líderes comerciales presentes que sostienen la cultura, no solo la expresan
Cuando falta uno, los demás no escalan y terminan provocando un círculo vicioso.
3. El liderazgo que sostiene vale más que el que exige
El patrocinio de la alta dirección y la presencia de los líderes comerciales sonlos pilares que más frecuentemente fallan. No porque los líderes no crean en el cambio, sino porque el día a día los jala de vuelta a revisar resultados, no a construir comportamientos.
Gartner (2024) señala que los equipos comerciales cuyos líderes hacen coaching activo y visible tienen hasta un 28% mayor probabilidad de adoptar nuevos comportamientos de manera sostenida.
El entrenamiento define el rumbo y entrega el mapa; el liderazgo es lo que realmente ayuda a navegar y sostener el cambio.
Conclusión
Si tu empresa está invirtiendo en transformar la forma en que sus equipos comerciales se relacionan con los clientes, la pregunta ya no es si el entrenamiento funciona. La verdadera pregunta es: ¿qué tan preparada está la organización para sostener el cambio?
Porque el talento existe. Las habilidades se desarrollan. Pero la cultura no se improvisa; se construye todos los días, con liderazgo, alineación y consistencia.
¿Cuál de estos seis pilares es hoy el más débil en tu organización?
É possível mudar a cultura de uma organização?
Hoje em dia, poucas organizações não estão envolvidas em um (ou vários) processos de transformação cultural. Novas formas de trabalhar em organizações mais horizontais e adaptativas, melhorias na cultura de segurança, orientação ao cliente, transformações nas áreas comerciais e excelência operacional, entre outros.
E é aqui que surge uma das grandes perguntas:
É possível mudar a cultura de uma organização? E, se sim, como fazer isso?
Para ajudar a responder a essas perguntas—frequentes entre nossos clientes e amplamente discutidas—gostaria de compartilhar o que aprendemos na BTS ao longo dos últimos 38 anos sobre o que funciona e o que não funciona (até agora, pois em transformação cultural estamos sempre aprendendo).
A boa notícia é que a resposta é sim.
A dificuldade está na segunda pergunta: como fazer isso?
Um projeto? Uma iniciativa?
Um ponto importante é que a transformação cultural não é um projeto com início e fim, mas sim um processo contínuo e em evolução. Isso muitas vezes gera tensão em organizações acostumadas a uma lógica de projetos.
O que é crítico e frequentemente ignorado?
Existem elementos que, quando considerados e aplicados corretamente, tornam a transformação muito mais eficaz. No entanto, muitas vezes são ignorados.
Esses elementos são:
- Envolver as pessoas. Quanto maior o envolvimento em todos os níveis, maior a probabilidade de implementação das mudanças.
- Tornar a mudança tangível e vivida no dia a dia, conectando teoria e prática. Transparência é fundamental.
- Toda mudança tem impactos positivos e negativos — ambos devem ser comunicados com clareza.
- Mudança cultural exige tempo e transformação de mindsets e estruturas organizacionais.
- A cultura deve estar conectada à estratégia.
Como estruturamos a transformação cultural?
Nosso modelo se baseia em quatro etapas: definir resultados, criar líderes de mudança, incorporar mudanças e sustentar novas formas de trabalho.
1. Definir resultados
O primeiro passo é estabelecer resultados claros e alinhamento executivo. É necessário conectar propósito, visão e objetivos organizacionais.
Ações:
- Coleta de dados (entrevistas, focus groups, visitas)
- Diagnósticos culturais
- Definição de expectativas (Leadership Profiles
2. Criar líderes de mudança
Todos os líderes devem atuar como agentes de mudança. É fundamental engajá-los emocional e racionalmente.
Ações:
- Programas de liderança
- Playbooks
- Feedback contínuo
3. Incorporar mudanças
É essencial transformar mentalidades e sistemas organizacionais.
Ações:
- Coaching
- Sprints culturais
- Cascata organizacional
- Avaliações comportamentais
4. Sustentar o novo modelo
Garantir continuidade através de redes, dados e suporte contínuo.
Ações:
- Integração com processos de talento
- Uso de IA no dia a dia
- Monitoramento da transformação
- Comunidades de prática
A importância de ser paciente e impaciente ao mesmo tempo
Transformações culturais são complexas e não têm fórmula única.
Ser estrategicamente paciente e taticamente ágil é essencial para ajustar e evoluir continuamente.
Esse equilíbrio permite transformar a jornada em algo positivo e sustentável.
Este é apenas um resumo.
Se quiser aprofundar com exemplos e práticas:
Baixe o PDF completo e acesse todo o conteúdo.