Most Executives take managing risk quite seriously, the better to evade the kinds of crises that can destroy reputations, value and even cause ruin to an organisation.
Especially in the wake of the Brexit, many are striving to put in place more thorough risk-related processes and oversight structures in order to detect and correct, safety breaches, operational errors, and over-leveraging before they become full-blown disasters.
However, processes and oversight structures, albeit essential, are only part of the story… we are human after all!
As CEO, it’s tough to point the finger at anyone else when shareholder value is eroded, a brand is damaged, or catastrophic loss occurs. But the types of risks that we have to manage are ever-changing. Risk
The world around us is rapidly evolving, and we are faced with social, economic, cyber and political risks like never before. Can a false tweet cause the market to crash? Can one unsatisfied customer reduce sales via social media? The answers are yes, and yes!
What is people risk? People risk is having the wrong people in the right positions. People risk is having a weak tone at the top that sets little precedent. People risk is the failure to understand brand. People risk is a leadership failure that trickles down. People risk is the uncontrollable side of what people do. Employee risk management is where HR adds true value to any organisation.
Some organisations have found that crises can continue to emerge when they neglect to manage the front line attitudes and behaviours that are their first line of defence against risk. This so-called risk culture is the milieu within which the human decisions that govern the day-to-day activities of every organisation are made; even decisions that are small and seemingly innocuous can be critical.
The most effective risk managers are accepting of risks, small and large, and thrive on solutions. They act quickly to move risk issues up the chain of command insisting on transparency and lightning-fast action. Isn’t it always the case, an issue “nipped in the bud” prevents escalation?
Fear of Change
Fear of change is a cornerstone of people risk. When your people fear change, the status quo remains — and the evolution of your organisation stagnates.
The things that are often overlooked in estimating the total cost of risk lie in the indirect losses e.g. down time, overtime, damaged equipment, customer satisfaction, and the damage to your reputation. An insurance policy may or may not help you cover these losses, but all of this should also be factored in to your risk management planning.
While people risk management may be a new concept to many, this is a vital function for everyone in any leadership function (formal or otherwise) in their organisation.
Standing still is no way to compete in the marketplace- let’s not forget cultures are dynamic by definition!
To find out how the specialist team at HCHR can help you to mitigate risk within your organisation, then call us today on the number below: