There are many reasons to implement risk-management, but there is only one sure way to guarantee that you implement risk-management well. Three keys exist to unlock the potential of risk-management in any enterprise, regardless of its scale or the nature of its business, and they are required to ensure the cultural shift that is entailed to maintain the benefits of such a paradigm shift.
Unlike traditional safety, which dictates to workers, risk-management is far more participatory. It requires employee engagement at a level that frightens many, despite it being proven to work and to be more cost-effective. This employee engagement takes place at a most basic level by treating employees as risk resources, respecting that they know many of the risks they face, and understanding that communicating their value will cause them to seek additional knowledge that is formative in creating better risk profiles and better control mechanisms. The employee who is engaged in this model invariably responds in the immediate term and with largely positive inputs, and that response is maintained as long as the relationship and communication is maintained. The biggest risk in this is not time-loss, as many fear, or cost increases, but that the employee inputs will be not be reflected in the actionable choices that are communicated as the process of transition occurs. Workers will rapidly divest interest if their input is seen as irrelevant, and the process of adoption is unresponsive to their concerns. Contrary to management fears this distributes too much control, the reality is that to do this well, to engage and maintain engagement, requires stronger management control, and that control is generally accepted more by the workers since the control is not dictatorial, but representative of their collective interests in going home at the end of every day. The higher the risk-profile of the employee, the stronger their engagement will be, since their awareness is enhanced by their perception of personal risk.
The engagement of employees is a culture-changing engagement, and it leads to participatory management by its nature. This terminology aside, what we really gain is that there becomes a clearer separation between practical management activities and productive management activities. As risk-management takes hold, employees will form risk-awareness teams, or control development teams, providing the raw material that managers can shape into productive policies, safe practices, and whatever other tools assist in communicating effectively. The manager role then becomes more focused on enhancing productive returns than on managing immediate concerns. This participatory model flows upward, creating a stronger hierarchy of control at the management level, easier communication, and a higher rate of acceptance of management decisions flowing downward. It will never ease dissatisfaction with decisions that have a negative impact, but it does dramatically reshape the way decisions are viewed, when, for example, the inputs that informed the decision were largely generated by the successive layers of operational employees. If a team of ten welders defines a need for a new control to prevent injuries, and that control is shaped and approved by them, there is a higher likelihood of immediate acceptance. More importantly, because of how those decisions are made, because the cultural shift has embedded the idea that change is acceptable and even desired, imposition of controls does not seem arbitrary – they can and will be changed to reflect the balanced needs of the workers that must implement. To maintain the participatory management process requires a cultural shift toward significant improvements in communication, with less focus on autocratic deployment of decisions and more focus on allowing dynamic communication. The higher the management skills sets, the more effective the productive returns, and the more freeing this aspect of risk-management will be. If the management sees the change in culture as positive, it will be maintained; if fiefdoms and competitive management are the normal, the risk-management model will fail because of competing and divergent interests.
Perhaps the most vital of the keys, since it makes the decision-model function effectively, is related to communication of metrics. Traditional models fail ludicrously because they provide faulty performance metrics by their nature, making it practically impossible to manage “safety.” Risk-management eschews the reliance on raw counts in favour of extension of analysis via linkages. If the metrics are communicated effectively, the decisions that come from the analysis of those metrics will be rational, will hold over the term of their value, and will be easily conveyed downward from the executive level. When managers understand the directives, and workers understand them, then the enterprise functions with a focused effort; when communication falters, and dictums replace decisions, the resistance to implementation renders the process for risk-management defective. The executive branch benefits from risk-management less because of the model itself than its associated mechanisms for communication. Good metrics flowing upward, with the ability to ask questions that have achievable answers, defines a better foundation to make complex decisions. It also shows the level of diligence that is unarguable in worst-case scenarios, because it is possible to observe that based upon the best possible information, the best possible decisions were made, taking into account the agreement of all operational levels of the employment pool. In other words, decisions were neither arbitrary or based on known faulty information. Decisions then become decisions of the company for its benefit, rather than made by the executive without context.
Implementation of a risk-management system involves alignment of organizational behaviours with the operational objectives. This model creates and sustains positive change, because it involves a comprehensive communication model. It, in fact, embeds directive management mechanisms in operations. This imparts a closed loop operational system as a side-effect as certainly as it provides safety as a side-effect. But it all falters if employees disengage, if mid-level management fails the communication requirement, and if the metrics that guide executive decisions are communicated poorly.
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