Post by Lorna Beaton on Aug 18, 2021 9:48:18 GMT
1. Is Risk ever acceptable? If so, how much risk is acceptable?
Yes, risk is acceptable you need to take risks to give you flexibility and allow for innovation. You need to ensure you are managing risks through controls such as policies to protect the organisation from risks. An acceptable risk level is one that you can afford, can be mitigated and where the benefits of risk outweigh small levels of risk that are manageable and can be identified and mitigated.
2. How would you assess your program/company’s overall risk appetite?
Consider what could go wrong with the business strategy and within the organisation. Do ‘stress tests’, analyse scenarios of different aspects of the business for risk. Consider if there are policies dealing with risk in place? Do employees happily divulge about risk and take responsibility for risk? Do employees have a risk mindset and understand potential consequences if risks are not managed?
As Henry Ristuccia pointed out you need to understand your strategy and what ‘value killers’ there are that could ruin an organisations reputation. For example, it would not be good for Fedcaps reputation if we put participants into jobs that they did not get paid for.
3. Is operating without risk a smart business decision?
You need to take considered risk to move forward, to allow for innovation and to give competitive advantage and perhaps break into new markets geographically or from a service or product perspective. Risk can help you achieve your goals; the risk just needs to be managed at a strategic and organisational level. Risk needs to built into in the organisational culture to truly help the organisation manage risk. This approach is business critical given the importance upholding agency reputation in todays market. You need integrated risk management frameworks, early warning systems and comprehensive contingency plans to help mitigate risks.
4. Given its growth, what are some risks that The Fedcap Group faces? (include reputational, financial, structural etc.)
Not-for-profit social service margins are being cut whilst expectations of service delivery are increasing. We need to ensure we can deliver our services efficiently whilst upholding quality standards. If our service on one programme is not up to scratch because we have cut staff to meet tight financial margins, we could put the whole organisations reputation and future at risk. Poor service quality leads to poor reputation in communities, stakeholders, and funders. If we do not deliver an effective service, we also run the risk of not getting paid especially in a market that is more about payment by results. Fedcap is growing quickly so it must keep control of the risks and ensure risk is engrained in the mindset of all employees. This in turn will empower staff to have their own risk management initiatives.
5. How do we engage staff in understanding and actively managing reputational risk?
Ensure that risk management is embedded in the culture and that all employees understand the value of reputation, what is expected of them to uphold reputation and what the consequences of reputational damage could be. There needs to be risk reporting, governance and polices that all staff are aware of and using. All these help embed a risk management mindset.
In my daily business I ensure I have a risk register that is continuously reviewed. The risk register highlights the severity of the risk to the program, where the risk has been escalated to (if need be) and an agreed action. Recently, I have been helping with restart implementation and set up a new manager with a risk register to ensure all risks were being captured, escalated (if need be) reviewed and actioned.
6. Discuss a specific example of reputational risk that is directly relevant to your program/company?
On Fair Start Scotland we engage the majority of our participants via social media. Social media does come with risk but it is a measured risk that is managed to ensure we meet our company objectives in todays environment. We need to ensure our reputation is not damaged by say negative remarks on our various platforms.
If we deliver a positive customer experience it reduces the likely hood of any negative remarks in the public domain. However, to manage the risk of negative public comments being made our pages and continuously monitored by both front-line managing content and further supervised by managers. Any problematic comments that could impact our reputation are immediately escalated to managers. The risk is assessed, and appropriate action taken. This action could be a simple reply to the participant to an investigation of the comment.
Furthermore, our social media platforms are regularly and independently audited out with the teams directly involved with producing and managing content. This approach embeds the significance social media can have on our reputation and demonstrates the organisations investment to mitigating any associated risks with social media.
Thankfully, negative comments are a rarity and of low risk to the business. However, we are not complacent to the impact a sole negative comment could have on our reputation. Conversely, we receive lots of really positive feedback and engagement via social media that develops our service reputation.