# Exercise: Designing Risk Incentives

This framework helps audit and improve risk incentive structures:

1.Audit current incentives:

- Identify formal incentives (compensation, promotion criteria, etc.)
- Map informal incentives (recognition, influence, opportunity access)
- Assess alignment between stated risk goals and actual incentives
- Identify conflicting incentives that undermine risk management

2.Design collaborative incentives:

- Define specific behaviors you want to encourage
- Create balanced metrics combining leading and lagging indicators
- Incorporate both individual and collective performance measures
- Ensure incentives are meaningful to target audiences

3.Implementation planning:

- Sequence changes to avoid disruption
- Communicate purpose and mechanics clearly
- Provide transition support for adjustment periods
- Establish feedback mechanisms to identify issues

4.Measurement and refinement:

- Track behavioral changes resulting from new incentives
- Monitor for unintended consequences
- Adjust approaches based on observed outcomes
- Celebrate and communicate early successes

This structured approach helps create incentive systems that genuinely support collaborative risk management rather than merely adding security metrics to existing frameworks.

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(c)[Kayne McGladrey](https://kaynemcgladrey.com/) - [Get the full book "Cyber Risk is a Myth"](https://www.routledge.com/Cyber-Risk-is-a-Myth-A-Business-Approach-to-Integrated-Risk-Management/McGladrey/p/book/9781041249054)