Every company faces risks in day-to-day business, but it’s how those risks are handled that makes or breaks a company’s success. If the COVID-19 pandemic was any indication of the importance of risk management, it showed us that it’s critical to be flexible and adaptive to changing conditions (and act as quickly as possible).
A risk management culture is one in which every employee at every level of the company is aware of potential risks, how to identify them and what to do if one arises. Once employees are familiar with the potential for risks, they’ll be much more prepared to adapt and respond when they crop up. A risk management culture has more to do with creating a readiness mindset for risk mitigation, regardless of what the risk may be.
Ways to build a risk management culture
With “all hands on deck” when it comes to managing risk, the more responsive and flexible a company can be. This takes several steps to educate, communicate and maintain your risk management plan.
- Make employees aware of risks. What threats does your company face, what impact could they have, and why is it important to deal with them right away? Risks can be anything from health (like with the COVID-19 pandemic), to technology (like cyberattacks), to safety (like proper handling of machines and equipment). Make sure all employees are aware of risks through meetings, trainings or in-services.
- Clearly communicate next steps. If an employee becomes aware of a potential risk, what should they do? Supply every worker with a clear list of instructions for how to handle a risky situation, such as who to contact or how to report the incident. Make sure steps for communication of a risk are easy to understand and follow, helping to ensure employees will follow them.
- Practice what you preach. From the C-suite on down, everyone should be aware of risks, the importance of handling them properly and what to do when a situation occurs. Leadership should always operate with potential risks in mind as an inspiration to all employees to do the same.
- Assign responsibilities to key contacts. This can mean assigning a risk committee as a central point of contact for risk management, as well as individuals tasked with managing each potential risk. This will help ensure that nothing falls through the cracks within your company.
- Offer incentives. To encourage employees to follow company policy and avoid risk, offer incentives for the right behavior. For example, you could offer a bonus or reward to an employee for identifying a risk and figuring out a potential solution.
Work with an expert
Not sure where to get started with risk management? We can help. Odell Studner will work with you to assess and mitigate your company’s risk. To learn more, contact us today.