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Cultural Risk and Your Organization's Reputation
Unlocking performance potential
The spotlight often shines on cultural risks only after an organizational crisis or incident. But forward-looking leaders are shifting to a proactive approach to cultural risk management to elevate their organization's reputation. Deloitte can help.
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Driving the right culture
Eighty-two percent of executives say that an organization's culture is a potential competitive advantage. That's according to more than 7,000 human resources and business leaders surveyed in Deloitte Touche Tohmatsu Limited's Global Human Capital Trends Report.
But only 12 percent of respondents believe they're driving the "right culture." And more than 50 percent are attempting to change an organization's culture in response to scrutiny by regulators, shifting talent markets, and other challenges.
Shifting the paradigm
An honest look at an organization's culture can shed light on whether it's fueling business momentum or creating risks.
Macro business issues—cost and regulatory pressures, digital disruption, cyber threats, talent shortages, and others—have clear cultural implications. Corrosive cultures can pose significant challenges, making the organization more vulnerable to a wide range of potential risks. These can include high employee turnover, mishandling or theft of sensitive information, poor execution on high-visibility initiatives, or low customer loyalty.
Leaders who purposefully align values, beliefs, and actions with macro-level activity and messaging within their organization tend to be more effective in executing business strategies. It starts by identifying desired cultural attributes. Then they're institutionalized through purpose-built mechanisms that encourage expected behaviors and discourage actions that produce suboptimal outcomes. And leaders who are also monitoring and measure reputation risk and culture can use those indicators as guideposts for ongoing improvements.
"Culture is a system of values, beliefs, and behaviors that shapes how things get done within an organization."
"Culture risk is created when there’s misalignment between an organization’s values and leader actions, employee behaviors, or organizational systems."
We help our clients establish enterprise-wide culture risk and reputation risk management programs to gain greater insight into their organization’s culture, employee engagement, employee behaviors, and market signals. Collectively, these insights can inform actions to proactively manage risk and foster a culture where employees embrace an organization’s shared core values and demonstrate behaviors that protect, preserve, and enhance an organization’s brand and reputation.
Culture risk management programs are founded on an established governance structure and reporting cadence with executive leadership and the board. Program design, implementation, and ongoing execution activities build on this foundation to focus on:
- Assessing organizational culture reveals how things get done—and provides a starting point for a program. Diagnostic survey tools, such as Deloitte’s CulturePathTM, can provide actionable visibility into organizational culture and the data needed to assess and understand strengths and gaps.
- Measuring employee engagement indicates how people feel. Diagnostic survey tools, such as Deloitte’s EngagePathTM, help reimagine employee engagement to provide actionable insights with a focus on strategic priorities for greater business impact.
- Monitoring employee behaviors
showswhat people do—individually and collectively. Designing and establishing risk-based behavior monitoring—enabled by behavioral science, cognitive technologies (e.g., user behavior analytics), and data analytics—provides an understanding of insider threats and conduct risk.
- Identifying market signals uncovers what the market says. External risk and reputation sensing, augmenting human intelligence through cognitive technologies and advanced analytics (e.g., Predictive Risk Intelligence), provides an outside-in view of perceptions about the organization.
- Proactively managing culture risk turns insights—what does it mean—into action—what to do. Within robust governance and management processes,
outputfrom culture, engagement, behavior, and signal activities provide data-driven insights to inform proactive culture risk management actions.
- Providing assurance on culture gives understanding as to whether the program is effective.
Why choose Deloitte
Our skilled professionals can help you:
- Gain objectivity. Culture is a soft asset, subject to biased interpretation. We help you measure your current state, gain leadership consensus on your target culture vision, and translate that vision into indicators that can be measured and understood.
- Find culture risk "needles in the haystack." Combining deep specialty in human capital with behavioral science and data analytics, we provide the ability to monitor across large organizations for culture risk indicators that could otherwise be difficult to detect.
- Align to your broader risk management framework. Bringing global leadership across each area of risk management, we help you establish culture risk management capabilities that support and enhance your larger risk management programs and objectives.
- Drive outcome-based decisions. We help clients create a broad and ongoing culture risk management program that continuously assesses, mitigates, and adjusts strategies to deal with potential gaps in addressing culture risk.
Contact us to learn more about protecting your organization's reputation and unlocking your potential to enhance performance.