Risk Culture should and is the heart of the people and the processes.
Set the Scene: Dinner every Wednesdays at your favourite local, with your partner/friends/family.
You know it’s going to happen, you always do it. Its tradition, you don’t refer to a manual, hell, you don’t even think about it. You “just do it”!
📷So why a lot of do companies fall short in incorporating RISK into their culture?
One reason can be the use of too many risk tools? All is well using trusted models, but like JP Morgans function found, at a point in time, people became complacent, stopped thinking and relied solely on risk models without really identifying crisis. You can read more about why JP Morgan’s Risk Management Failed here.
Lehman demonstrated it had a weak risk management culture: It was there on paper but not in practice. We want to avoid exactly that. Read more here.
I was asked in a recent conversation how I would promote risk culture across the business.
Make it accessible to every level of the organization. Doesn’t matter if it doesn’t pertain to your everyday work, just like company vision/mission/values that compose a culture, risk awareness is one in same. If we truly want to incorporate risk into the company culture everyone must know it exists, and that it is our objectives that drive forward the business we work in day in day out. Get creative. A lot of difficulties lie in engaging, but we are all creative beings. Why can’t we use visuals to get the message across? When we want to truly find out if our employees understand our risk culture, we should get them to draw a picture of what they think. Then see if it matches the actual risk culture we are trying to portray. A picture is worth a thousand words. Fact!!
Corporate culture and human behaviour intertwine. We need to promote the motto of
‘the way we do things around here’
It. has to be meaningful to be fully utilized and effective.
The ultimate question we need to ask and learn from big companies is that ;
‘ Is there actually a Risk culture present?’ Or Do we just ’think’ there is?
Maybe we should really start getting our employees to start drawing their vision of Risk culture and see if It indeed matches that of our Risk division.
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