Latest News

Beyond Theory

Risk management and the tiny minority

Posted: 14/12/12 by Beyond Theory

The events that propelled the BBC into a full-scale crisis in autumn 2012 involved only a tiny minority of staff at the broadcaster. The first group were the handful of editors and managers who decided to pull a programme exposing the late Jimmy Savile as a child sex abuser, and the second were the cadre who failed to exercise journalistic checks on the false allegation of abuse against a senior retired Conservative politician. All the while, the vast majority of BBC staff continued to operate at high standards of service in online news, Strictly Come Dancing and the rest.

It feels unfair, but it is a common dynamic. Most of the corporate crises in the past decade, including at several British banks, featured the same unrepresentative minority wreaking havoc, with many innocent bystanders seeing their CVs suffer collateral damage.

What these disasters highlight is how risk management is really a form of people management. According to Bill Tate, governance adviser at the Institute for Systemic Leadership, it is important to distinguish the different causes of failure in their institutional context. He says the causes may be “an excess of hierarchical power being granted or taken by a CEO - for example, Royal Bank of Scotland betting the firm on ABN Amro, or a small professional group making a serious misjudgment, such as BBC’s Newsnight journalists and decision makers”. It is not just a question of individuals’ performance.

Leadership adviser Roger Vicarage, who has helped many organisations through crisis, adds: “What you are dealing with [in the case of the BBC] is a chaotic situation. The first thing you need with any chaotic situation is strong leadership - you have to staunch the flow of blood. And then, if you look at how trust is built, it involves straight talking; listening to other people and understanding their perspective. It involves gradually becoming reliable over time, keeping up commitments - then trust is rebuilt. You don’t go straight to trust.”

In the financial services industry, crises emerged at several institutions owing to years of emphasis on short-term gains with weak risk management.

Paul Beesley of Beyond Theory was senior manager for people strategy and insight at Nationwide Building Society until early 2012. He says: “In September 2007, when people were queuing at Northern Rock to take money out, they were queuing at Nationwide to put money in. It was fascinating to watch as well as being quite scary. And it’s about the element of trust - trust is such a big thing in a brand. Reputation takes ages to build up, but can be so easily destroyed by something going wrong.

“Risk management and people management are two sides of the same coin. There is the cocktail party test - if you say ‘I work for so and so’, are you proud or do you hide behind it? You need to have a sense of pride in who you are working for.”

To read the full version of this article, see Personnel Today.

Back to Latest News

World Pay Logo