Focusing On Risk With and Through Your People
Organisations use values as guiding principles to represent the integral way an organisation works. These core principles set the expectations to guide and inform the actions of all their employees.
Most organisations promote (pitch) their values and culture as a point of difference to the market, prospective employees, and current employees, to portray a favourable image.
Employees tend to be drawn to organisations where they believe there is an alignment in values and a sense they are heard and can contribute to the business. It gives employees a deeper reason to show up every day.
This is not new, almost a decade ago, Deloitte shared research that 94% of executives and 88% of employees believe a distinct corporate culture is important to a business’ success. The survey also noted the strong correlation between employees who claim to feel happy and valued at work and those who say their company has a strong culture. Alignment between the values of the organisation and employees, aids to ‘engage’ employees and that is important in risk management.
“Your organisation may truly believe in its values and its people. But is what you are communicating in conflict with what you are practising?”
Does your risk management strategy conflict?
Your risk management strategy influences how your organisation operates. You need to comply with market, legal and regulatory requirements and expectations. The thing about planning for risk is that it can make us fixate on potential threats. To protect what we value most we can become so worried about the things that might happen that we introduce systems of protection, that are themselves sources of risk. Risk reduction methods can create overhead, as well as frustrate employees and even create a culture of mistrust. At times this can cause more harm than the original threats we hoped to protect ourselves against and can conflict with the values you promote.
Your organisation’s risk management approach affects your employees as they touch every aspect of your business. If your risk management measures doesn’t support your employee’s or impedes their ability to perform their job function, they can become frustrated. Worse, employees can become creative to find work arounds to complete their work, leaving your business exposed.
Even with our best intentions to reduce the effects of certain types of risks, we can find ourselves creating and exposing the organisation to other types of risks.
One of those risks is ‘disengagement’. Many executives’ associate disengagement with productivity and don’t consider the risk exposure. When employees are disengaged, they are at best satisfied with the bare minimum level of productivity and focus, and we know that lack of attention leads to errors and ‘unintentional’ insider threats. Which is why statistic shared from Gallup’s recent State of the Global Workplace: 2021 Report, that 80% of workers are not engaged or are actively disengaged, is incredibly concerning.
Read more: 4 Activities To Enhance Employee Engagement
It is senior executives that are accountable for the organisation’s risk management plan. Though once the risk management plan moves from the original handful of decision makers into the business, the real responsibility, the execution and day-to-day management of risk, is by your people.
The Royal Commission’s findings within the Finance Services sector highlighted that accountability resides at the top. It is senior executives that are accountable for the poor behaviour, decisions, and actions / inactions of their employees and the systems within their organisation. This drives home the importance of understanding why organisational risk starts and ends with your people. That the organisation will win or lose as a team when it comes to managing risk. That there are heavy costs for the organisation, and personally, in penalties and reputational damage when getting this wrong.
Related: Why Accountability Isnt’ That Hard
Time to rethink
How you approach risk management matters, as does the way your processes, policies, procedures and technology affect your employees. After all, they are the ones who interact and navigate challenges with your work environment. Does your organisation’s risk management strategy help and support them to be successful?
The evidence stacks up – whether it comes from the field of business strategy, psychology or political science – if you focus on employee engagement, there will be cultural benefits, you’ll improve the reputation and revenue of your business, create a workplace where people are proud to come to work, and reduce your organisational risk profile.
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“It is only by focusing on risk with and through your people, that are you going to truly solve your organisational risk exposure and drive transformational change.”
This first appeared on Leaderonomics.com