Michael Felber, Partner
The recently published WEF Global Risks Report 2023 paints a disturbing picture of our planet: According to the experts surveyed, it could be facing a polycrisis - a situation in which numerous crises lead to a greater overall impact than the sum of their parts.
It is a core task of reputation management and also of strategic corporate communications to predict possible scenarios as far as possible and to ensure that one's own organization is prepared for them within the bounds of what is feasible. This may be very challenging in view of the current uncertain outlook, but it is all the more important.
"Culture eats risk management for breakfast" – why a risk conscious culture is important and right now
Dealing with a potential polycrisis requires risk consciousness. A risk conscious corporate culture supports thorough risk assessments, promotes open communication about potential risks and implements processes to manage them. It also fosters an attitude of continuous improvement that emphasizes learning from mistakes.
In contrast, a risk averse culture prioritizes the avoidance of risks altogether. It prioritizes stability and preventing negative events over growth and innovation. This may reduce the risk of error. However, an impending polycrisis, in which individual risk components influence each other, can overwhelm such a culture and inhibit important developments.
Practical steps toward building a risk conscious culture
Building a risk conscious culture is a collective effort of the entire company. A prerequisite is a commitment exemplified by leadership to make risk management a high priority, to create transparency, and to promote a proactive approach to risk mitigation.
As a central integrator and partner to all functional areas of the organization, the communications function plays a special role in this. It has the resources and the mandate to provide conceptual support for cultural changes and to implement effective measures through change communication.
But where to start? The following concrete steps are suitable for the communications function to show initiative and position itself as a supporting force in risk management.
Practical steps for risk communication
A risk-aware organization has a plan that is integrated into its overall communications. This specifies how, when and with whom the company communicates about a risk, including clear and consistent messages.
If this is not already routine in your organization, propose regular cross-functional meetings to discuss the risk situation and coordinate measures. Confidently bring the dimension of reputational risks and the special competencies of communications into these meetings.
Based on the risk analysis, identify and assess the main risks to your organization, e.g., supply chain disruptions, data breaches, and environmental damage. In the absence of a systematic analysis, you can find support, for example, in the WEF Global Risks Report, the Ipsos Global Trustworthiness Monitor, the Page Society Survey of CCOs, the Conference Board C-Suite Outlook, or the Edelman Trust Barometer.
Develop a concept that describes when and how you communicate with which stakeholders about which risks and which channels you use to do so (e.g. blog, newsletter, intranet or townhall meetings).
Identify key issues for internal and external communication, formulate position papers and language rules. Plan active or reactive measures to mitigate these issues.
Integrate risk communication measures into your internal and external content planning.
Coordinate your organization's contacts with key stakeholders to incorporate feedback and concerns and communicate your approach to risk management to stakeholders.
Practical steps to foster open communication about risks
"It's not what you preach, it’s what you tolerate" (J. Willink). Clear and open internal communication promotes a culture in which potential risks are freely addressed.
Set up an anonymous reporting system through which employees can report potential risks. Advise the leadership team to regularly draw attention to it as a sign of their commitment.
Motivate employees and key stakeholders such as your suppliers or your partners at associations and authorities to play an important role in the early detection of negative developments and to report them.
Regularly share risk management successes and failures through appropriate channels within the organization, such as ‘Learning Moments’ in team meetings. This helps foster a culture of transparency, accountability and trust. In this way, you encourage employees to raise potential risks and you build trust that they will be taken seriously.
Regularly highlight available training and updates on risk topics in internal and external communications.
Practical steps to strengthen crisis preparedness
Constant preparation for possible crises helps organizations to be more resilient and better equipped to handle even multiple crises at the same time.
Conduct a crisis simulation exercise to test the organization's crisis readiness - or an audit to have the baseline assessed objectively and in comparison to other organizations.
Update your crisis manual. If your organization does not already have such a manual: Develop one that meets the needs of your organization. This manual describes roles and responsibilities, key decisions and procedures in the event of a crisis, and communication channels used. It also includes resources such as checklists, key contacts and templates.
Train individuals for the team responsible for crisis management and communications. Involve experienced external forces for support as needed. To act quickly and effectively in a critical situation, the team must be intimately familiar with the necessary resources.
Work closely with risk managers to integrate crisis plans, playbooks or checklists that exist in various functional silos into an integrated crisis preparedness and crisis management. The increased awareness of risk management and the organizational advances due to the COVID-19 pandemic provide a nearly ‘perfect storm’ for securing the needed internal support.
Encourage regular joint training and simulation exercises for the crisis team. In this way, all participants learn about the interlocking processes, can make improvements and develop the mutual trust to act harmoniously even in stressful situations.
Yes, a polycrisis is overwhelming. But: The journey is the reward.
Especially if the risk topic has not been on the agenda frequently in the past, the communications function must first focus on one or two areas and proceed step by step. Every effort, no matter how small, helps build a risk conscious culture and ensures that the organization is better prepared for an impending polycrisis.