Cultivating sustainable performance
Measuring and developing the risk management culture
Risk culture is a key success factor for an efficient and sustainable organisation. In the 'people, process, technology' risk management trinity, the ‘people’ dimension is in fact the driving force that spurs on the two other dimensions.
Risk culture is the foundation of any changes in Risk Management
When effective, risk culture enables employees to understand what constitutes a risk, whether or not the degree of risk is acceptable, how risk information operates in the decision-making process, and how decisions must be made based on a risk/benefit analysis.
Studies have shown that a sound Risk Management Culture is generally correlated with lower likelihood of loss and improved performance.
Deloitte can support you in an effective and modular way to:
- Define the culture you want to build, based on best practices
- Assess the existing level of risk culture and define the different employee attitudes in your company when faced with risk
- Identify areas for improvement and rank them to achieve the target level and type of risk culture you want
- Carry out improvement and change actions involving all stakeholders
In addition, Deloitte can help you to raise awareness of leading practices when managing environmental and ethical risks. Our professionals have in-depth experience of your industry and can thus provide relevant indications and practical advice. The Deloitte team has highly specialised expertise in the design and improvement of risk management practices
Deloitte’s experts use the very latest methodologies and can call on exclusive tools to help you manage your organisation more efficiently.
The Deloitte approach
Providing a measurable and objective view of risk culture
To help enhance understanding and measurement of the company’s risk culture, Deloitte has developed a model made up of 16 indicators covering 4 areas:
- Competence: analysis of how risk culture is taken into account in recruitment, learning, skills, knowledge and operational practices
- Organisation: study of processes, procedures and governance of risks
- Relationships: study of the interactions between the different hierarchical levels within the company in areas specifically covering ethics, management and leadership behaviour and communication flows
- Motivation: analysis of why people manage risks the way they do, how risk is taken into account in performance management, risk appetite, incentives and obligations. By applying this model, Deloitte thus analysed various situations such as fragmented organisations that do not learn from their mistakes, or that give in to the pressure of short-term profitability objectives and competition, sometimes with catastrophic consequences in the long-term.
Changing behaviours through games
The development of skills and good behaviour in risk management comes from practical experience. Business gameification can help.
The ‘Serious Game’ developed by Deloitte is a game that allows participants to test a realistic model of their company, and to react when faced with multiple scenarios.
Players go through several economic cycles, make critical decisions, are subject to interdependencies and, most of all, have to face the consequences of their decisions.
Participants learn to balance social and environmental dimensions, risks and profits in a realistic economic environment.