Risk. It’s a term that doesn’t normally fill us or our colleagues with joy. After all, “the possibility of something bad happening” is the type of thing that can keep us awake at night.
For NEBOSH and its learners – historically routed in the health and safety industry – risk has often focused solely on the potential for harm (these are often called threats). As the Health & Safety Executive describes it, “the likelihood of potential harm from a hazard being realised”. But actually, risk is really about uncertainty; it can also lead to positive outcomes. So, in business we can nurture the culture and our people to also look for the positive consequences (often called ‘opportunities’).
The world is dynamic; risks can emerge, change, or disappear. Processes and planning can help our people prepare for events, but decisions are ultimately made by individuals using the information available to them at any one time. If we can empower and equip everybody in an organisation to deal with risks then its possible to create a powerful culture that not only protects the organisation from harm but that also seeks out and adds value.
Of course, every organisation is different – styles that respond to some risks may be less effective at dealing with other types of risk. For example, an approach that relies on high levels of innovation may be less effective at ensuring that changes are sufficiently managed, whilst a more cautious approach may mean that organisations are less able to identify or less prepared to respond to sudden change. The Organisations Resilience Tension Quadrant, developed by BSI and Cranfield School of Management, is a useful model to find out what type of organisation you’re working in.
Embedding risk management into organisational decision making
Every organisation has a risk management framework of some sort (otherwise it wouldn’t be in business very long). But it may not be formal and it may not be good or effective. ISO31000 is a formal risk management framework that incorporates some fantastic guidance – which creates a structure for decision making. Complementing this, you then have intuitive decision making, based on human behaviour, which can be felt in all areas of an organisation when people are enabled to operate within the parameters of the framework.
There are typically three separate but interlinked cultures at work when it comes to risk, all of which will influence the way the organisation and its people will behave when faced with risk decisions (not withstanding individual tolerances and appetites to risk which can be influenced by a myriad of external factors):
Developing a positive risk management culture
A positive risk management culture is not all about avoiding risk. Good organisations are not risk free, nor risk-proof, they must take some risks in order to survive; not taking risks means missing opportunities to grow.
So how do we create this great culture where people are empowered to take calculated risks within their sphere of influence and deliver positive value? You can nurture and encourage it by using a range of tactics (as with many things involving people, the key often lies in effective communication delivered via a range of channels). Here are a few ideas that could help you get started:
NEBOSH and IIRSM have partnered to develop a new qualification in managing risk. It explores broad topics such as climate-change, cybercrime and geopolitics to widen knowledge of risks beyond health and safety and develops understanding of the principles of risk management and psychology around risk decision-making.
The NEBOSH IIRSM Certificate in Managing Risk is initially available to study online only via a selection of NEBOSH’s global Learning Partners. eLearning gives learners the flexibility to study at a time and place to suit them and successful learners will also be eligible for discounted IIRSM membership. Click here for further information visit.
