There’s a popular phrase that showcases the relationship of culture in an organization: “Culture eats strategy for breakfast.” Attributed widely to Peter Drucker, the phrase puts a spotlight on the significant impact of culture over any other type of organizational strategy or planning—including risk.
The 2024 PwC Trust Survey captured an interesting perspective on organizational culture by focusing specifically on trust within the workplace. The high-level results of the survey found that, in general, there’s more trust among colleagues and between managers and employees than people initially think. But one of the more nuanced findings plays a specific role in risk management: familiarity. The March 2024 survey found that in general, the more familiar employees are with one another and with senior leadership, the more trust they have with those individuals.
Why is this an important consideration with creating a risk management process for your organization? Well, in a phrase, culture eats strategy for breakfast. If you are building a risk management strategy for your organization, but your organization lacks trust among individuals within your organization, any strategy is going to fall short and have weaknesses in the areas that are most vital to risk management. But if you foster a culture of trust, the science shows that not only will employees be more satisfied with their work, they will have higher productivity, fewer sick days, more satisfaction with their lives overall, and less stressed. This is hugely impactful to the risk profile of an organization. Employees who care about the work they do and the people they work with will have more trust in the organization in which they work and be less likely to cause or tolerate harm, fraud, and other risk-related behaviors.
A workplace culture of trust can also influence how risks are identified, assessed, and managed within organizations and societies. For example, in cultures with a strong hierarchical structure, risk management processes may be more centralized and top-down. On the other hand, in cultures with a more even approach, risk management may involve broader participation and decentralized decision-making. By broadening the “buy-in” for decisions, employees will be more likely to adhere to the process and the final outcome.
Trust also impacts communication. Direct communication styles may be more prevalent in some cultures, leading to more explicit discussions about risks, while indirect communication styles may be more common in others, making it challenging to assess and address risks effectively. Plus, when it comes to safety and risk management, clear communication helps individuals reduce their anxiety about others and fear over something negative happening within the organization, creating a better culture overall.
At the end of the day, the workplace culture—whether on-site or virtual—that an organization forms will ultimately have a huge impact on any strategy that is put in place. Employers have a lot to gain by creating a workplace in which trust reigns king, employees are highly engaged, and they believe in the goals and methods of their organizational work. These organizations also reflect a key balance in risk tolerance: enough appetite among the organization and its employees to inspire and celebrate innovation, but enough resistance that risky behaviors are acknowledged and mitigated before harm is done.
Curious about how to create this balance in your organization? Reach out. RiskVersity can help.
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