Committing The Entire Organization To Risk Management
When we talk to our customers about effective risk management, we always insist that risk management only works when the entire company is involved in the process. It sounds like a great thing to say, but what does it mean? As risk management experts, we can help identify risk and put protection in place to try and prevent financial disaster. But if the entire company is not on board with risk management, then even the strongest protective measures can find it difficult to do their jobs.
Creating the Right Culture
When it comes to creating the right culture for risk management, all of the cliches apply. You need to get everyone from management on down involved, and the whole company needs to buy in. Safety and reducing risk needs to be a priority with every member of the staff, and all of the decisions staff members make need to have some basis in reducing risk.
Every employee working for your company represents exposure to risk. By offering the right kind of training and developing interactive programs that encourage safety, you can reduce risk and get the entire company involved in avoiding problems.
The Company Needs to be All-In as Well
It is not enough to point out ways that employees can reduce risk and encourage a safe working environment. The company needs to commit real resources to risk management and give employees tools to work with that will get the job done. Training, safety incentive programs, and corporate policies that encourage safety are good starts, but they are only the beginning.
Risk is everywhere in the construction world, and to reduce risk the company has to be willing to invest in good equipment, proper maintenance, and not cut corners for the sake of a few more dollars. That extra investment of resources by the company can result in a safe working environment that does not eat up profit by paying for higher insurance premiums or time lost due to injuries.
Risk Needs to be Part of Business Planning
When a construction company updates its business plan, a big part of the process is identifying future trends in the industry. Another part of business planning is projecting new business divisions the company may want to start as it expands and develops its skill set. These business planning processes must include risk management elements if the company is to make risk management an ingrained part of its culture.
When planning for the future, what kind of risks for the company do future trends create? As the company plans to adjust to these trends, part of the adjustment must include risk management. New business divisions mean new challenges and new risks. To be successful, the company must look for its exposure to risk with new business ventures and plan to reduce that exposure as the new ventures become reality.
It is one thing to say that you will commit your entire organization to risk management, but it is quite another thing to actually do it. A company that is focused on risk mitigation is more efficient, more effective, and much more profitable. It is important for every construction company to make risk management planning an important part of everything the company does now, and in the future.