Enterprise risk management (ERM) solutions, risk indicators, risk taxonomy, SWOT analysis, loss exposure… do you feel mobbed by all these jargons? Already preoccupied with the latest technologies, price fluctuations, market dynamics and altering regulations, are you confident you are not forgetting something important?
What really matters, more than any of the so called “requirements”, are your people and processes. People are the crux of any risk management framework. No risk manager will argue against people being considered the most valuable asset in an organization. And before processes are aligned to business objectives, they should be tweaked to suit employees for a constructive work system.
Bring your attention to two components – people and processes, and your concerns about Operational Risk Management (ORM) will be wiped out, in no time!
Even more than expert recommendation, what you need is to take time out to understand your employees and set things right for them.
Enterprise Risk Management – But, where to start?” That is the key question most business owners and managers struggle to answer.
Of course, there is no quick fix. You will have to surf through the entire operational process from start to finish. Here are a few guidelines from CAREWeb’s team archive of experiences to help you find a good grip on ORM:
Start from scratch – Have you got the right people in?
Adequate intelligence, experience, talent, skill and dedication are qualities any promising leader seeks in an employee. Like every efficient recruiter, make your own customized list and strive to achieve the best from it.
What are you doing about the people who fall short?
Usually, managers end up compromising on a couple of qualities when hiring an employee. It is acceptable, but limiting responsibility to the appointment stage is a common mistake managements make.
People need to realize that hiring is only the beginning of a long-term commitment from the employees’ end. Take the effort to nurture and refine the workforce through training, workshops and programs to complete the checklist of requisites. Such an initiative can arise only from the employer’s end. Recruiting people with the right talent is important, but keeping them in a positive frame of mind and motivated to achieve great results are crucial responsibilities.
Right person, right time, right place…
As an employer or manager, it is important to know that there is always a right person for a particular job. The wrong mix ruptures business continuity severely. Being able to identify the right individuals alone mitigates more than half of the operational risks. However the responsibility is a shared one, between trainers, recruiters, managers and the employees themselves.
The other two factors, “right place and time”, depend largely on your capability.
These are the steps to achieve them and cut down on a large proportion of the risks:
- Firstly, identify the potential of your people
- The next step is to sort and structure them
- Proceed to standardize the processes and train your staff to adhere to them
- Finally, place people in the right roles with the right responsibilities
Create value and culture for your people
Employee needs should be one of the topmost priorities.
- Create a secure and dynamic environment for people. A culture that motivates employees, slays the risk of erosion and brain drain in organizations.
- Self-esteem is a value that enterprises often overlook. In fact, it drives people to optimize their efforts towards work. Respect, reward and recognition are crucial to boost self-esteem and invoke the productive and innovative nature of employees.
However, efficient monitoring and auditing across the workforce is not enough. Ensuring personal satisfaction of employees, providing them the right incentives and conducting activities of their interest, all lead to high operational scores in risk reports.
A prevailing misconception is that “the people factor” pertains only to operational risks. However, with most of the lower tier employees handling strategic risks themselves, the pervasiveness of risk effects becomes evident.
There is hardly any risk area that excludes people. Basically, organizations need to learn and accept that people are the core of businesses.
Many companies have established that a good workforce, in spite of bad process and technology, is passable, but vice-versa? It is simply impossible! Know your people, and like the big names, Google, Facebook and Salesforce, you too will be listed among the best places to work after having kindled a deep acquaintance with success.
Latest posts by Hamzah Chorghay (see all)
- People + Processes = Efficient Operational Risk Management - October 20, 2014