Risk is back on the agenda, not just from the perspective of how organisations operate, but also in terms of how individual employees behave.
High profile events at News International and at Swiss banking giant UBS, following the arrest of suspected rogue trader Kweku Adoboli amid accusations of perpetrating a £1.5 billion banking fraud, are a timely reminder of just how damaging risky situations can be if left unchecked.
While quantifying and minimising such intangible risks may not always be an easy task, the benefits can be immeasurable, however. So how do HR directors put effective steps in place to identify, encourage and reward new ways of working? Here are three suggestions:
1. Change attitudes
A huge amount of effort and energy is often put into developing new systems and processes that can identify, mitigate and track risk across an organisation. But less thought is given to understanding or changing the way that people engage with the subject.
For any strategy to be effective and sustainable, however, attitudes need to be addressed from the outset. But this is a complex process. Factors such as geography, history and leadership approaches can all help to create inconsistencies across the business.
Moreover, each individual has their own inherent attitude towards risk, which will influence not only what they perceive to be risky, but also how they respond to a given scenario. What is perceived to be a significant and unacceptable risk requiring urgent attention by one person or group might be perceived as manageable and acceptable by others.
This is a real challenge for HR directors trying to encourage a consistent approach towards risk-taking.
2. Use positive language
Discussions around risk management rarely generate excitement. It is hard for people to engage with a subject that encourages them to think about potential disasters and how to avoid them. But again, HR directors need to change this attitude if they are to make progress.
Significant changes can be achieved, however, simply by employing more positive language. For example, stop using the word ‘risk’. Instead talk about managing ‘uncertainty’ or even better ‘uncertain situations that matter’.
When presented as a way of exploring actions that may result in previously unseen opportunities – rather than simply mitigating threats – discussions about risk become a lot more compelling. But such conversations do need to focus on commercial objectives.
The most effective start with the question: ‘What is our ultimate aim?’ followed by: ‘What could happen that might influence the outcome either positively or negatively?’ Such an approach helps participants to understand the value of spending time developing a risk strategy, which makes them more engaged as a result.
After having identified the potential risks, the next step is to develop risk processes and templates in order to understand their potential impact on the business. But it is important to ensure that individuals and teams do not become paralysed by the sheer number of risks that require action.
Prioritisation here is key in order to ensure that momentum is maintained and progress made.
3. Encourage ‘good’ behaviour
There are a number of ‘good behaviours’ that are worth encouraging in a bid to try and reduce organisational risk:
Acting on areas of concern: In reality, this means encouraging people to act on issues that niggle them but they fail to mention because it is not their job or area of expertise. Staff should not feel inhibited in asking ‘stupid questions’ and be given a safe way of doing so.
Listen: Team leaders play a critical role in terms of setting team expectations, so role-modelling desired behaviours and encouraging people to speak up about issues in either a group setting or quietly on a one-to-one basis is helpful.
Agree: Each team must agree what ‘good’ risk behaviour looks like and what they can do to ensure it takes place. Only by determining suitable boundaries will people truly be able to commit to new ways of working.
Feedback: Individuals within teams are best placed to give each other feedback – either when they see someone demonstrating ‘right’ behaviour or not, as the case may be – and to agree appropriate means of recognition and reward for their efforts.
Leading by example: Individuals and teams often struggle with why they should do something differently if they don’t see senior leaders or other members of the business doing it too. As a result, team leaders need to use their influencing skills to ensure new ways of working that ensure personal safety, well-being and improved business performance are adopted.
Measure progress: To ensure sustained and consistent success, progress should be monitored and measured. Possible metrics here include:
- Number of new risks raised and mitigated across the organisation
- Number of informal and formal risk conversations taking place
- Level of engagement across team and business boundaries
- Simple organisational culture surveys that assess whether workers know what constitutes good risk behaviour, how empowered and listened to they feel and whether previous barriers to behavioural change have reduced.
Although it takes time, it is possible to create a strong and consistent risk culture by taking a structured and measurable approach. A clear understanding of the value of such a culture is required throughout the organisation, however.
This necessitates on-going communication about what the organisation stands for, the boundaries within which it operates and what constitutes acceptable risk-taking behaviour. Consistent encouragement to adopt new ways of working and visible reward for achievements in this area will be vital if such an approach is to be sustained.
Ultimately, the success of any risk strategy is judged in the context of the business’ reputation and performance – something that News International, for one, had to learn the hard way.
Julie Williams is a partner at consultancy, Tinder-Box Business Coaching.
