Separating the culture of compliance into people and process
If you were given two options, a 2% or 8% improvement in your risk management processes, which would you choose? As with everyone else in any organization, risk managers are expected to deliver more and get more from their current resources. We’re expected to deliver more and better results from what we are using. If given the choice, I would assume that the 8% would be the first choice, yet we seem to settle for the 2%.
The reason for settling for the 2% is because of the perceived tools in our toolbox that are available to get any improvements. The 2% improvement comes mainly from software changes, and current process evolutions. The 8% comes from tools that are readily available in our toolbox, but we do not see them or recognize them as something we can use. One tool is the ability for risk managers to develop and use social capital as part our day to day activities. By separating the culture of compliance into people and process social capital is the development of goodwill by individuals in their interactions in any corporate setting. By developing and building social capital, there is a more trusting and engaging relationship with those who you interact with.
Why is this concept important for risk managers? Because it begins to bring the culture of the organization into the risk management process. It may seem like it requires a major change and a potential costly re-organization, but it does not. All that’s needed is a subtle shift, an incremental shift in the right spot to begin moving towards incorporating people and their culture into the risk management systems.
Culture is a significant contributor to improving a risk management system and building trust. To get 8%, the focus needs to be in individual training and coaching however it needs to be done in a trusting environment and social capital goes along way to building that trust. Moving towards the use of social capital moves improvement in the risk management process from 2% closer towards 8%
It should be noted that both options can be used together it’s not one or the other. In fact, both are needed to be used together, social capital improvement can drive process improvements. Using process improvements with social capital will get you more than the 2% process improvement and closer to meeting or exceeding the 8% improvement.