Creating Ethical Cultures that Proactively Manage Risks: Insights from CultureScope Research

At iPsychTec, we've worked with a multitude of clients across diverse sectors in measuring and embedding cultures that drive positive risk and ethics outcomes. Since the inception of our culture diagnostic (CultureScope), we've worked on over 100 projects to do with risk/ethics, helping industry giants and smaller organisations embed the right behaviours to better manage risks and unexpected events.

What have we learned about risk/ethics culture? What's the secret to success?

The short answer is there's no one-size-fits-all solution. Each organisation is unique, with distinct risks, people, contexts, and stakeholders. However, our experiences with successful clients have uncovered a shared trait:

These organisations articulate precisely what positive risk management means to them in terms of behaviours and outcomes.

Most organisations have a clear understanding of the risk/ ethics outcomes they are looking to achieve (e.g. protect customers from harm). But those with the best risk/ ethics cultures also clearly articulate the behaviours they aim to encourage and embed that will drive better outcomes.

It can sometimes be tricky to understand the difference between behaviours and outcomes.

Key characteristics of behaviours

1. Within our sphere of control: Unlike outcomes, behaviours are entirely within our influence. We can shape and enhance them through intentional efforts, ways of working and processes.
2. Observable: Behaviours are visible to others, reflecting our ethics, communication, adaptability, and initiative.
3. Impact on Outcomes: Behaviours directly influence the outcomes we seek. Consistent positive behaviours enhance the likelihood of achieving desired results, as we've seen in all of our work.

Key characteristics of outcomes

Outcomes are the consequences of our actions, influenced by external factors, timing, luck etc. While essential indicators of success, relying solely on outcomes can limit our understanding of our efforts.

How do you know which behaviours to focus on embedding to drive better risk management?

Every organisation possesses its own distinctive traits, so it is critical to measure the behaviours in your organisation and connect the dots to the risk and ethics outcomes of importance. This process equips you with a comprehensive behavioural risk model, facilitating measurement and monitoring, and empowering you to identify potential adverse risk outcomes before they materialize.

That being said, across our extensive risk culture work and research, eight key behaviours that consistently predicted better risk management across a variety of sectors and risk models have emerged.

The challenge is that during highly volatile, uncertain, complex, and ambiguous (VUCA) situations, these behaviours may go against human nature. It's essential to recognise tendencies toward siloed thinking, short-term focus, internalisation, resistance to new ideas, and a fixation on immediate results. Leaders in culture and risk must ensure that organisational systems foster a culture aligned with these behaviours.

Do you observe these behaviours in your organisation?

If you're curious about exploring the dynamics of positive risk culture further, get in touch with us.