Accelerating impact from day one: A guide for new CROs

Stepping into the role of chief risk officer (CRO) comes with a lot of questions: Where to start, what to prioritize, and how to make an impact? The way new CROs approach these questions in their earliest months shapes their ability to achieve long-term success.  

To understand the mindsets, skills, and practices that work best for new CROs, McKinsey conducted in-depth interviews with more than 30 current and former CROs of major financial institutions; each of them spent at least five years in the role.  

In the most recent article in this series, the authors examine how top CROs set their objectives, mindsets, and operating models. Their research led to the identification of three CRO archetypes: the architect, the protector, and the business accelerator—each with its own motivations and ways of working.

Underlying these archetypes are six habits that take root early in a CRO’s tenure and shape their success in the role. To sum up: Be explicit about a risk and resilience North Star; invest in, empower, and create the next generation of leaders; engage deeply with C-suite leaders and the board; treat supervisors as partners; focus on what only the CRO can do; and monitor CRO personal effectiveness.

In this article, the third in the series, the author focus on the challenges and opportunities that CROs face in adopting the six habits in their critical first few months in the role and the strategies that drive early success and the pitfalls that constrain progress. The authors show how leading CROs strike a balance between taking stock and taking action to build resilient risk organizations.

Habit 1. Ensure clarity on the risk function’s North Star, strategy, and culture.  The CRO needs to: Adjust the North Star.  Adapt the risk strategy to enable goals.  And articulate risk culture ‘from–to.’

Habit 2. Optimize the risk organization.  CROs need to: Optimize organizational structure.  Move fast on team changes.  Adjust the operating model.

Habit 3. Establish relationships with the board and executive team.  CRO needs to:  Strengthen board relationships and create common agendas.  Identify go-to contacts across topics.  And find the right cadence for reporting.

Habit 4. Establish relationships with supervisors.  CRO needs to:  Establish a proactive and transparent supervisory engagement approach.  Reprioritize ongoing efforts.  And incorporate supervisory input.  

Habit 5. Be intentional about what only the CRO can do.  CRO needs to:  Plan your legacy.  Set top priorities.  Redefine working rhythms for efficiency.  

Habit 6. Monitor personal effectiveness and reevaluate the personal operating model for long-term success.  CRO needs to:  Shape your remit.  Make time for personal priorities.  And Review your personal board.

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