April 29, 2020 Managing risk across a diffused workforce
In the unchartered waters of COVID-19, how are you managing risk?
In our March 2020 article, Reporting Risk, we highlighted the FRC’s instruction for companies to consider the possible impact of COVID-19 when reporting principal risks and uncertainties. At the time they drew particular attention to areas for consideration such as disruption to the supply chain, staff shortages due to illness and reduced customer demand. Since that time it’s a fair bet that the list will have expanded to include lockdown and the forced closure of certain business sectors.
But there is also another area of risk to consider. That is the way in which existing risk factors can be identified and managed when your people are working from home. After all, it is one thing to keep your finger on the pulse of the business when everyone is in the office, quite another when people are at the end of a phone or broadband line. Equally, when your people are working from home they may be tempted to make decisions on their own; decisions which would in normal circumstances be thrown around and debated in the office.
Risk management can therefore become a very different challenge across a diffused workforce. But that needn’t be a problem if properly managed. Businesses which already operate across multiple sites or which include key suppliers in their risk matrix already have to face some of the challenges of managing risk across a wider constituency. The secret of success comes down to clarity, communication and culture.
We have talked before about the way in which people are the guardians of risk, far more than process and procedure. So the first element of the risk management strategy is to be clear about how potential risk is to be managed. There is nothing wrong with giving your people a certain amount of autonomy but that autonomy has to be set within clear boundaries.
That is where communication comes into play; taking steps to ensure that the risk management message is not only clearly communicated but also that it is understood. Setting up reporting lines and holding regular discussion groups will also help to ensure that individuals don’t feel so isolated and therefore are more likely to question rather than go outside their remit.
Finally, your people are more likely to play their part if they feel part of a culture which supports them in this difficult time. When people feel supported, they in turn become guardians of the business and of its aims; in the process looking out for and taking steps to mitigate the chance of risk.