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RISK ASSESSMENT
Transform Your Risk Culture
Simple Steps for Moving Beyond Compliance
BY CHARLES REDINGER
The notion of “risk culture” has been getting increased attention in numerous arenas. Seventy percent of the respondents to Deloitte’s most recent “Global Risk Management Survey” say that a priority in 2018 is “establishing and embedding the risk culture across the enterprise.” While the survey’s focus is on financial institutions, its findings link to operational risks related to industrial hygiene and environmental health and safety. Such a link is also found in “Executive Perspectives on Top Risks 2018: Key Issues Being Discussed in the Boardroom and C-Suite,” a survey conducted by North Carolina State’s Pool College of Management. A good risk culture should reflect organizational values, clarify the organization’s risk tolerance, and incorporate the ability to quickly anticipate, identify, and respond to emerging risks. Increasingly, a poor understanding of risk culture is itself considered an unacceptable risk.
Few topics have a higher profile and are more central in organizations than those involving risk.
CHARLES REDINGER, PhD, CIH, is president of Redinger 360, Inc. in Harvard, Massachusetts. He can be reached at (978) 456-8105 or via email. Acknowledgements: The author thanks Fred Boelter, Jeanne Fallon-Carine, and Scott Dotson for their contributions to this article. Send feedback to The Synergist.

So, how well do you know your risk culture? Is it something you think about, or even attempt to characterize? And if you do, does it need an upgrade or transformation? Increased attention to risk beyond occupational exposure limits is relevant to industrial hygiene and environmental health and safety professionals given their importance to organizational resilience and sustainability. Consider how IH/EHS fits into an organization’s larger risk-related thinking, and how this thinking steers resources toward risk aversion, risk tolerance, or trust in regulatory compliance. Also consider how a regulatory compliance orientation has influenced the evolution of IH/EHS methods and practices from its earliest days, and how it has impacted mental models and ways of thinking about risk. Surveys such as Deloitte’s and NC State’s suggest that a regulatory and compliance orientation permeates a culture and can create blind spots, resulting in a negative impact on numerous performance indicators.  Just as there are risks associated with a passive approach to risk culture and a narrow view of it, there are fruits to harvest by understanding and transforming it. The following steps, gleaned from our experiences and from an AIHA webinar on risk culture held in September 2017, can help transform a risk culture. RETHINK WHAT’S DRIVING RISK MANAGEMENT Government regulations impact the way organizations define and manage risk. This isn’t bad per se, but it has affected organizational cultures in general and their ability to manage risk in particular. Understanding what’s driving risk management is an important first step in making the risk culture stronger. Is regulatory compliance the main driver? Or are the organization’s core values driving risk culture? To determine what’s driving risk culture, IH/EHS professionals must look beyond our field’s common definition of risk as “the severity of impact of an adverse event, and the probability or likelihood of that event occurring.” ISO standards define risk as “the effect of uncertainty on objectives,” a broader perspective that leads to a stronger risk culture. We have seen several companies, including an innovative pharmaceutical company, create a strong risk culture by anchoring risk-related activities around their core values, mission, and purpose, rather than regulatory compliance or objectives.  INCREASE RISK AWARENESS Leaders often want their work force to have a high degree of risk awareness—that is, the ability to consistently identify hazards and assess risk, and to respond quickly and appropriately when needed. It is from this awareness that IH/EHS professionals anticipate, recognize, evaluate, and control (AREC) hazards and mitigate risks. Awareness of operations, processes, and systems is fundamental to what we do in the IH/EHS field. Increased complexity in the risks we confront, which encompass much more than exposures and traditional safety issues, requires wider risk awareness.  To transform a risk culture, we must understand how much risk awareness is present, individually and collectively. We can do this by first asking, “What are we aware of, and is this sufficient?” at a basic level of operations and processes, and then more broadly at the level of supply chains and mental models. To increase risk awareness, consider AAREC, where the additional A refers to awareness.  EXPAND YOUR RISK VOCABULARY  We all know words matter. The way we speak, and the words we use to convey our ideas, are central to communication. As Charles Handy, a leading business futurist, wrote in Harvard Business Review, “We are unconscious prisoners of our language. While most of the time this constraint matters little, at times of momentous change in culture or society, our use of old words to describe new things can hide the emerging future from our eyes.” In a similar vein, Einstein said, “We cannot solve our problems with the same thinking we used when we created them.” 
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In 2017, the AIHA Board of Directors changed the Risk Assessment Committee’s name to Risk Committee. The committee’s mission also changed to include not only the technical “assessment” but also characterization (context and perception), communication, benefit/cost (reward/risk) analysis, and management. These changes stemmed from recognition of the increased bundle of risk-related challenges and questions being put to IH/EHS professionals.  Examples of new words and ideas that have impact in IH/EHS include sustainability, corporate citizenship, and social responsibility, as well as transparency and license to operate. The innovative pharmaceutical company mentioned earlier adopted new risk-related terms such as brand protection, community involvement, small footprint, zero waste, and rapid response time. To expand the risk vocabulary in your organization, consider whether any of these words resonate across the work force. SUSTAIN THE TRANSFORMATION After your organization has transformed its risk culture, management systems can help make sure the changes stick. Whether augmenting an existing system (such as ISO 14001 or OHSAS 18001), developing a new one, or starting from scratch, consider integrating the ideas put forth in this article. For example, with ISO’s new occupational health and safety management system (ISO 45001), key points can be integrated as follows: 
  • Defining risk: address in Section 5, leadership and worker participation; and Section 6, planning.
  • Anchoring risk-related activities to core values: address in Section 4.1, understanding the organization and its context; Section 5.2, OH&S policy; Section 6.1.2, hazard identification and assessment of risk and opportunities; and Section 9.3, management review. 
  • Increasing risk awareness: address in Section 7.3, awareness.
  • Expanding vocabulary: address in Section 7.4, communication.
Few topics have a higher profile and are more central in organizations than those involving risk. Increased attention on characterizing and transforming risk culture impacts individual areas such as IH/EHS as well as the organization’s larger culture. IH/EHS professionals are expert in many risk domains and can provide leadership in transforming risk cultures. Consider rolling up your sleeves, digging into your organization’s risk culture, and looking at ways you can provide leadership in its transformation