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What gives anyone the right to play fast and loose with the lives and livelihoods of others? Think carefully before you answer because the cause may be closer to home than you realise. The sad truth is that organisations large and small have been playing fast and loose with the rights and freedoms of others on a daily basis and it generally takes something cataclysmic to stop them. Every time ‘computer says no’ and there is no right of appeal; every time unwelcome sales calls are sanctioned or correspondence is sent out from fictional lawyers; every time the rules are ‘bent’ to make the profits roll in is a time when the organisational culture is shown to be somewhat less than ideal.
What’s this to do with risk? Quite simply, when the culture fails, everyone and everything is put at risk. Customers, shareholders, employees, the wider public and the business itself are all vulnerable when the culture goes awry. Because culture is set from the top, any failing can infect swathes of an organisation. The outward signs may be a chorus of dissatisfaction on social media or a sudden drop in sales as dissatisfied customers look elsewhere but look deeper and those same organisations may well have failings on multiple levels.
Risky lending leading to default, failed mergers, computer failures, mis-selling, rate fixing…we’ve seen evidence of the sort of problems which can arise when the culture fails within the finance industry but the same root cause pops up across the spectrum. And that root cause is quite simply an adherence to a culture which cares all for short term profits and nothing for its long term effect on the wider world.
When employees are not aligned with the business strategy, when underperformance threatens competitive advantage, when infighting and back covering are rife, the chances are that any risk or compliance processes will either be ignored or will be seen as an unnecessary nuisance. Box ticking without care will be the order of the day and employees will think nothing of altering records. Turning this around, creating a set of beliefs and behaviours which embraces compliance and risk management and sees them for the positive forces which they are will only happen when the leadership themselves first embrace the need for change. For example, there is little point in trying to turn around employee attitudes to compliance if targets are set which expect unrealistic turnaround times for processes.
So the leadership have to change and then they have to create the conditions for change throughout the organisation. Bringing on board team leaders and middle managers will help as will engaging ‘leaders without a title’ in the process.
When the outward signs of culture failure appear the only solution is an immediate cultural overhaul. This may require a fundamental change to the business strategy, a resetting of values and vision and a re-alignment of employee engagement. It won’t be easy. Jobsworths, disengaged employees, public perceptions; all have to be overcome if there is to be any chance of success. Once a business has a poor reputation every small mistake, every error of judgement will be pounced on and magnified. Actions from five years ago which have just come to light will be viewed as though they occurred just yesterday. The road back to a more balanced and proactive culture is long and rocky but the only alternative is to watch the business slide further into the abyss until it is sunk by one too many risky decision.