A healthy risk culture: the key to company sustainability
Managing risk well is critical – after all, a company’s future depends on it.
Customers want assurance the organisation they’re putting their hard-earned money into can be trusted, staff want to know they work in a safe and stable environment and boards and regulators want to be sure the businesses they oversee are being managed safely, soundly and successfully.
When we consider risk and protecting the future of a company, it’s easy to think this mostly involves making as many sales (and therefore as much money) as possible.
But in reality, ensuring a business not only survives, but also thrives sustainably for years to come, takes much more than that.
"It's easy to think that making as many sales as possible to what's needed to protect the future of a company"
A company with an aggressive sales culture might see business soar for a year or so.
But if they don’t consider what could potentially go wrong (for example overly aggressive sales practices or poorly priced and targeted products) and do something about it, they could crash and burn pretty fast.
And if something does go wrong it can lead to a disaster.
The stakes are high. In a worst-case scenario, a major crisis can cause customers to lose faith and put their money elsewhere. Jobs could be at risk. Ultimately the existence of the organisation could be in jeopardy.
History is awash with examples of scandals where poor risk culture was a key factor.
So, what does a healthy risk culture look like?
Ultimately, it's about the behaviours, beliefs, attitudes and practices shared by people with a common purpose. And when organisations get these right, it shows.
"History is awash with examples of scandals where poor risk culture was a key factor."
The essence of a good culture can be boiled down to four things: good management, taking personal accountability, empowering people to speak their minds and the way in which people are rewarded.
Good management practices bring a healthy risk culture to life. It means management being clear about expectations, articulating what good looks like and setting positive examples. Having open communication, doing the right thing by customers and recognising hard work and good risk outcomes by giving credit and celebrating achievement is also vital.
When people feel empowered, they know they will be listened to. They’re more likely to raise issues when or even before they happen so that problems can be avoided or fixed quickly. Good role modelling is key. I believe we do this well at OneFamily. I see my colleagues and peers, like our Head of Customer Services and Direct Sales Jackie Davies, listening to those around them, championing colleagues, celebrating their contribution and inspiring them to go the extra mile for our members and customers.
This environment encourages our people to bring out good ideas, innovate and creatively solve problems.
It unlocks diversity of thought and drives continuous improvement, ultimately reducing risk for ourselves and our customers.
When we consider ways to manage risk to help a business thrive, our focus shouldn’t just be on hitting targets, but also the risk culture we create and nurture within our businesses.
That is the key to a sustainable future.
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