Assessing real risk – by understanding the impact of what people actually do

It’s not what people do that counts, it’s the effect or impact of how they behave that is critical.

Performance is all about what people achieve and the risk they introduce in doing so. People continually do things, making everyday choices and decisions as to how they behave hopefully following the right processes and procedures but it is not until we understand the impact or effect of this behaviour that we can understand the level of real risk.

For an individual this relates back to their level of competence and how that dictates their behaviour from which we can identify risks to performance. If we identify risks to performance we can establish development needs to mitigate those risks.

However, we don’t work alone, we work in teams, departments or sites, collectively following processes’, groups of individuals all behaving in a way that hopefully delivers collective business objectives, outcomes and governance requirements.

It is this collective behaviour that is the culture and it is the culture that delivers the results.

But how do we know what risk our collective actions or culture creates as we go about our business?

We are familiar with measuring individual competence but how do we measure organisational competence?

Risk is dynamic and not easily understood or spotted through periodic reviews.

Risk is a hugely dynamic issue. Organisational, departmental or process, risk profiles change as people do their jobs.

Have you ever wondered why after an unintended event or disaster, the post analysis shows the indicators of failure existed but were not picked up beforehand and acted upon?

Understanding the reality of dynamic risk isn’t about periodic measurements, surveys, KPi’s, workshops or risk registers – it’s about understanding the impact of changes in people’s behaviour on both positive and negative outcomes on an ongoing basis.

Understanding risk to business performance is an overhead

Organisations invest heavily in measuring KPi’s, carrying out internal audits and surveys, often doing this in ever increasing amounts of detail in the hope that poor performance will be identified before it escalates into a real business risk. Often this attention to detail comes with a cost, driven by wanting to spot the next “fire”.

Apart from the cost, this process is backward looking, the result being the creation of a lot of data but very little useful management information. These hard measures often result in hidden risks building up even if the “numbers” look ok. By the time these risk’s become a reality it is too late.

Cultural analytics

Organisations need as a minimum, to work smarter with existing spend. Targeting this investment at what really matters. Measuring the impact of how people behave as individuals and teams is key, the aim being to determine what risk is emerging before it becomes a reality.

Past performance is not always an indicator of likely future performance……….understanding peoples behaviours and how it impacts directly on future business results is a much stronger indication.

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About DEEPFATHOM

DeepFathom has helped organisations of multiple sizes and sectors across the world. Clients range from MOD, nuclear power, tech starts ups to agriculture and tourism.

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