SPECIAL SERIES

RISK DOCTOR BRIEFING

DEVELOPING RISK CULTURE: FIRST OR LAST?

By Dr David Hillson

The Risk Doctor

UK

Several things help to make risk management work. These include a risk process that is simple and scalable, which can be applied across the organisation to manage all types of risk. We also need competent people, with the knowledge, skills and experience to deal with the risks that might arise. Infrastructure is also important, providing the tools to support risk management and handle significant amounts of risk data.

But the most important contributor is the culture of the organisation, which provides the context for risk management at all levels. The ideal culture is risk-aware, encouraging people to take the right risks, and rewarding good risk management. So how can an organisation develop a strong and mature risk culture?

Two approaches are possible:

1  Culture first. One possibility is to start at the top, addressing cultural aspects directly. This requires a clear statement of intent from leaders in the organisation, laying out their vision and policy for risk management. They should describe their values and beliefs about risk, and explain the approach that they intend to take in order to exploit risk and create benefits. A senior manager should act as risk champion and the desired risk culture should be actively communicated to all staff, so no-one is any doubt that risk is being taken seriously.

Once a risk-aware culture has been established, other detailed elements can be put into place to turn the risk vision into reality. Staff can be recruited and trained for specific risk roles, risk processes can be developed, and a suitable risk infrastructure can be established. These steps should be easy to do because the risk culture already exists and is understood.

2     Culture last. A second option is not to worry about developing risk culture proactively, but to allow it to emerge naturally. This approach concentrates on putting all the practical elements in place within the organisation to allow risk to be managed properly, with good people, processes and tools. The focus is on getting the day-to-day implementation right.

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About the Author Dr. David Hillson Author Dr David Hillson, PMP FRSA HonFAPM FIRM FCMI, is internationally recognized as a leading thinker and practitioner in risk management. He is Director of Risk Doctor & Partners (www.risk-doctor.com), and has worked in over 40 countries. He is a popular conference speaker and award-winning author on risk, with six books on the topic. David has made several innovative contributions to improving risk management, and is well known for promoting the inclusion of proactive opportunity management within the risk process, and for his ground-breaking work in risk psychology.  David is an Honorary Fellow of the UK Association for Project Management (APM) and past chairman of its Risk Management Specific Interest Group.  He is an elected Fellow of the Institute of Risk Management (IRM), the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), and the UK Chartered Management Institute (CMI).  David is also an active member of the Project Management Institute (PMI) and was a founder member of its Risk Management Specific Interest Group. He received the PMI Distinguished Contribution Award for his work in developing risk management over many years. Since 1998 he has been a core author for the risk chapter of the PMBOK Guide®, and is a core author for the PMI Practice Standard for Project Risk Management.  David can be contacted at david@risk-doctor.com. To see his latest book, Managing Risks in Projects, published in July 2009 by Gower, visit http://www.gowerpublishing.com/isbn/9780566088674.

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