Risk management is an integral part of doing business for any company. Humans similarly apply risk management in their individual daily lives.
You don’t build a business. You build people, and people build the business.
- Zig Ziglar
However, the challenge is getting all those people building the business (company employees) engaged in risk management. How to improve their understanding of the need for risk management to sustain company growth, their role in risk management, and ultimately how to increase their commitment to adopt and embrace risk management as an integral part of their missions. And how to build bridges between personal and professional needs.
Risk management is all about changing behavior. The challenge is to determine what motivates human behavior. In a similar vein to Abraham Maslow’s Hierarchy of Needs, companies and individuals (employees) share three needs: Surviving, Thriving and Providing.
From the start-up phase onwards, companies focus on surviving with the primary intention of creating value for the various constituents (shareholders, corporate leadership, employees, and clients). Individuals similarly concentrate on surviving, intent on creating value in their own lives and the lives of their families.
For a company to thrive, it must increase its market share and its client footprint. For an individual to thrive, they must ensure constant growth on both the professional and personal front.
Both company and individual at the highest level must provide. Companies have a responsibility towards their constituents (shareholders, corporate leadership, employees and clients) to provide revenue and a return on investment. Individuals have an obligation to provide for their families.
The challenge to affect an ongoing changing behavior towards risk management is to constantly explain the mutual benefits to both the employees and the company. The notion of creating a risk management culture within an organization is relevant. However, people rarely embrace a culture if there is no understanding of the benefits, both professional and personal. Similarly, establishing a risk culture that only focuses on the key steps that the corporation should follow is bound to fail. Individuals, i.e., employees, invested in efficient, integrated risk management, are needed to affect those critical steps.
The Coronavirus outbreak provides a perfect backdrop to illustrate the importance of getting company and employees aligned around risk management. Traditional corporate crisis response steps such as reviewing pandemic preparedness plans, restricting corporate travel to affected regions or enacting work-from-home plans are correct and suitable to take. These steps will undoubtedly bolster the company’s sustainability and ultimately impact survival.
However, this crisis, more than others, also impacts the survival of individuals. Without people (employees) understanding and playing their role in risk management, even the best mitigation steps taken by the company will be inadequate. More critical and relevant actions for the company to abide by would be to provide solid, fact-based information to their employees (and their families). A good, trusted corporate communications program focusing on the outbreak, outlining impact to both people and company, listing steps to take to mitigate etc., will go a long way to stem misinformation and create trust between the company and individuals.
If such a corporate communications program includes information relevant to employees and their families on managing the outbreak in their personal space, that would inevitably yield good results. Sustained productivity, lower absenteeism, and a workforce embracing the company’s efforts to ensure their well-being will contribute to a thriving work environment. And in the end, both the company and the employee will meet their provide commitments.
Managing a crisis, such as the Coronavirus outbreak requires multiple functional disciplines to be accountable and involved. They include Human Resources from a workforce management perspective, Corporate Travel to affect any travel restrictions, Information Security to ensure employees working from home can access data in an easy yet secure manner, Employee Health from a well-being angle, Risk Insurance to ensure existing corporate insurance is adequately providing for a health crisis, Corporate Communications for the communications around the outbreak etc. Company leadership and the workforce overall should remain informed but not involved in the tactical management of the crisis.
Developing a culture where both the company and the individual employees accept their respective accountability towards risk management will also require those functional disciplines listed above and others. However, both leadership and individual employees should be involved in this endeavor to ensure its success.
Once both sides, the company and the individual employees, grasp and embrace the concept of shared needs around surviving, thriving and providing the managing of crises like a Coronavirus outbreak will become far less daunting.