Risk managers have got to be genuine, authentic and transparent in order to succeed, says Kevin Bates
A risk never got any better by someone hiding it and thinking they could solve it without notifying the right stakeholders, observes Kevin Bates, group head of risk and insurance at property and construction giant Lendlease.
Risk managers have got to be genuine, authentic and transparent in order to succeed. “People will sniff a fraud, as they should,” he advises. “Measure and poise are also important. Someone once told me, ‘have more than you show and say less than you know’, and I find them very wise words to live by. Always hold a little something back in everything.”
His other career advice? Don’t say no to the boss when an opportunity comes your way.
“If you want your career to grow, you’ve almost got to never say no when your chief executive gives you a tap on the shoulder,” he says, looking back on his 17 years within the organisation, which has seen him have several different careers in different parts of the world. “You probably get one free pass at saying no, but beyond that your career doesn’t necessarily have the growth and speed in it as it would for those who are happy to say, ‘pick me, pick me!’
“Certainly the organisation for which I work is incredibly meritocratic. If you are good at what you do, you will have opportunity.”
Scottish born and bred, Bates began his career at a law firm in London and describes himself as a “recovering lawyer”. He gained his BA in Law from the University of Dundee, but gaining a Masters in Construction Law and Arbitration at Kings College London. At that time, risk management was not an option within tertiary education.
Bates thrives on attention to detail. Early on in his professional life he was advised never to use the phrase, ‘that will do’. “You’re being paid to give your expertise in an area where very few have, and as you’re going through a body of work if you ever struggle and think, that’ll do. Don’t. Just think again and go through the detail again.”
Making the leap
Shortly after he joined the Lendlease legal team and had a fortuitous meeting in the gentleman’s toilet in the Harrow office of Lendlease with the company’s then CEO Greg Clarke (who now heads up the UK Football Association) that his career in risk took off.
The result of the fortuitous meeting saw Bates move out to the head office in Australia to work with David Hutton, who at the time was the CEO for Lendlease’s retail and communities business Down Under. “He said, ’This guy is Yoda, you’ll learn everything and anything from him’. ”
Six years on Bates had reached the all-important tipping point, the moment in which he felt he had truly become a seasoned risk professional. “It felt like, ‘I’ve got this! I can’t be surprised here and it’s exciting. Every day is completely different but I feel I can adapt’.
During that time he had gone from being a risk manager in Lendlease’s communities business to heading up risk and insurance for the region for the retail and communities business. “I went on to run Australia, and that’s when it was part of Asia Pacific within the Lendlease structure.”
The next tap on the shoulder came when the organisation decided to split the regional business in two. The then CEO for Asia, who I knew, said ’I need a general counsel, a head of compliance, head of risk and insurance for Asia. I said I was interested in being the head of risk but he explained he needed me to run all four functions, as at the time we couldn’t justify the overheads.”
Bates took on the challenge with the agreement that it would be a four-year stint, during which time he would find a long-term replacement for each of those functions. So he moved out to Singapore, travelling frequently between Singapore, Malaysia, China, Japan and Taiwan, immersing himself in the culture.
“I started learning Mandarin. It was just one of those magnificent times in my life that I look back with enormous satisfaction. I was running the entire region and I had such responsibility and accountability and at that point in my career, but I was ready for it.”
From the start, Bates was looking for talented individuals to take up the reins as the business grew. “As soon as I get my feet under the table I try and replace myself, because I can’t do my next job if I don’t have someone ready to do my job,” he explains. “It’s just good business continuity planning in case I win the lottery for example.”
“The first thing I did was give away legal, because the risk manager and lawyer in me knew I was dealing with five countries and five completely legal systems and cultures, none of which were in my training. So the first thing I did was meet with the general counsel and built the legal function with her.”
Then came the next tap on the shoulder. “Our current chief financial officer Tarun Gupta called me and said, ‘I need you to come back and run risk insurance for us. I mentioned I was really enjoying my time in Asia. His response? ’That’s great Kevin. Get on a plane’. That was six years ago.”
Bates is proud of how the organisation has handled the COVID-crisis, with crisis teams coordinated across all the regions in which the company operates. “I was able to inform our group CEO and my boss, the Group CCRO on a daily basis so senior management was aware exactly what was happening. I’ve been quite humbled by the performance of my team - I’m desperately proud of them.”
The pandemic itself was not a surprise, although the extent of the crisis was unprecedented. Having experienced managing the process for swine and bird flu in Asia, Lendlease already had pandemic plans in place. It may have been deemed a remote yet catastrophic risk, but it was there on the risk register.
“We have a suite of you good documents that are there to guide us on most scenarios, but was I able to just go to a pandemic plan for every single country in every single city in which we operate, and did it have a scenario plan for a shutdown of schools, transportation etc? Of course not and I don’t know anybody who did have that.”
Skill versus will
One of the things that has surprised Bates during the crisis was how some individuals really rose to the challenge. Not always the people he might have anticipated. Remote working has been really important in levelling the playing field and making it possible for introverts to excel in a way that was more difficult in the workplace.
“I’ve been floored at how wrong I’ve been about some people. It’s been baffling to me. I had a conversation with a member of my team and observed that he was really your thriving. ‘This is just me outside of the office. I am an introvert, and being remote has levelled the playing field for me!’ he said.”
“So do I think the COVID-crisis has elevated the risk profession? For those whose skill and will is in the appropriate quadrant, this is their time. The old adage of ‘never waste a good crisis’ has never been more appropriate than it is right now.”
The challenge is far from over, thinks Bates. Business models will have to change, disruptors have become the disrupted almost overnight, and a rapidly-hardening commercial insurance market is adding yet more pain.
He uses the current difficulties at Qantas, which announced 6,000 job losses and a three-year survival plan in June, as an example. “You need to know your business and your customer. Qantas are being, and will continue to be, disrupted. The horizon for them is whether or not it will be a speed bump, a sluggish recovery or a painful overhaul. Whichever of those it is will very much predicate on what the business model of Qantas looks like.”
In getting back to ‘business as usual’, risk managers will need to understand how the business environment has changed, in some ways irreversibly.
“Supply chain genuinely concerns me. There will be a migration away from South China manufacturing. So what does that mean financially? What does that mean from an expertise perspective. Employment will change and insurance will change. Were any cyber policies currently in circulation written with the intent of ninety percent of workforces working from home rather than in the office? I would argue not. So is it priced and worded appropriately?”
He thinks business integrity will become a big differentiator as the world moves forward. “Different organisations will be seen to be above the others because of their resilience and cultural integrity.”
Other macro-challenges like climate change and the need to adapt business models to embrace greater sustainability have not gone away. “As much everyone was exclaiming about dolphins in the canals in Venice and the ability to see the Himalayas clearly from parts of India which had lost that view decades ago, it doesn’t mean Mother Nature is healing.”
“Nature is very good and very quick at reclaiming things. But we’re still in a world of hurt in terms of rising sea levels and global warming. So businesses need to have a focus and commitment to sustainability as we look to the future, and I am thrilled that Lendlease has exactly that.”