In 1987, a London Underground ticket seller was alerted to a burning tissue on one of the escalators. They duly put it out, but didn’t report the incident. If they did, the slowly-building inferno under the station might have been discovered in time. Instead, several hours later 31 people were dead and over a 100 injured in the King’s Cross Fire, a notorious blaze that consumed one of the train service’s biggest and deepest stations.
The ticket seller wasn’t lazy or ignorant. Instead, by this stage the bureaucracy of the Underground had created a culture of chinese firewalls. Everyone knew their place. Health and Safety was not the business of the ticket office. Subsequent investigations found that this problem occurred consistently across the Underground’s bureaucracy, even at the highest levels. A fire quite literally burned under the floors, but the company’s culture made people blind to seeing it.
Why culture matters
Culture is a collection of habits. People who share a culture have similar ways of doing things. For example, driving on the left side of the road is a culture. People who don’t do that seem weird and can even be a danger. Company cultures are no different: they represent the collective habits of the employees, reinforced by the vision of leadership. This is why, when leadership and reality are not aligned, staff become disenchanted.
What does this have to do with risk? According to Deloitte, an organization’s culture determines how it manages risk when under stress. For some companies, their risk culture can be a liability. For others, it can provide both stability and a competitive advantage.
Risk is a goldilocks force: you don’t want too much or too little, the latter meaning less reward. But many companies don’t look at risk as a strategic ingredient – they simply avoid it as much as possible. It becomes a sideshow, one that shouldn’t include the employees.
Yet risk is all about intelligence, and who better to be the eyes and ears of the company than its people? They interact with customers, suppliers, processes and inventory every day. They can feed insight into risk measurements, which risk managers then present to the leadership.
It stands to reason that a good risk awareness culture is incredibly valuable to a business. Deloitte lists the following as crucial to risk culture:
- Commonality of purpose, values and ethics,
- Universal adoption and application of risk,
- Learning from risk, and
- Timely, transparent and honest communications
Giving staff the right tools
How can that be accomplished? The answer lies in the tools that employees use. Risk should have a functional value to the employees. This can be done using data culture and risk integration platforms. By deploying a cloud-based risk capturing system, you can reach across the silos that employees and departments use to secure themselves. It can also be scaled conveniently to adapt as the company does. This helps create a proactive-risk culture.
You can already see the tangible impact of cloud platforms by their sheer dominance: few major companies still do without a service such as Salesforce or its peers. These technologies are transformational, so it stands to reason you should tap them to transform risk culture. This is what we’re doing with Riskonnect.
Such a platform extends the flow of data to beyond the business silos, enabling risk professionals, managers and the exco to have a single truth and up-to-date view of the company’s risk profile. It also encourages employees to wield data for their own insights and creates a sense of risk as a strategic tool, not a curse.
An errant match caused the biggest fire in the London Underground’s history. But the real shock was how silos created a risk-averse culture that cost lives. Since then the London Underground has improved remarkably: today its main risks are not fire, but effective modernisation. London’s transport risk culture now tackles new problems such as commuter stagnation and pollution from vehicles. That is a big step up from ignoring the embers of an underground inferno.
Don’t wait for a fire to show you the strategic potential of risk. Invest a little today and start growing that culture that will ensure the business’ future.