Risk is an unavoidable part of life and business. Yet, despite potential bad outcomes, we invite risk and the possibility of reward into our every day, disappointment and danger be damned. That’s why creating a risk aware culture at all levels of your organization is especially important — from trainees to the C-suite.
When you think about risk, at times, the stakes can be pretty minor. You might aimlessly scroll through your social feeds, even though there’s a chance of encountering a Love Island spoiler. Or you may think that spending ten bucks on a surprise grab bag at Whole Foods could pay off, even if you run the risk of bringing home five of the same kind of soon-to-be expired burritos.
On the more serious end of the spectrum, for tech companies, any unforeseen event could disrupt your operations, damage your property, and even threaten your livelihood.
There is a time and place for taking risks. And playing with chance in the tech industry is perhaps the riskiest type of business you could imagine.
Why employee risk awareness is crucial for tech companies
The tech industry is fast-paced, constantly evolving, and heavily reliant on data and technology, all of which can create unique vulnerabilities.
When you work in tech, for example, you’re frequently dealing with extremely private and sensitive information of individuals and other businesses alike. Clients invest their money in your products and services and they trust you to deliver on their vision all while ensuring their safety and confidentiality.
If you don’t incorporate proper risk mitigation strategies into your day-to-day operations, you’re dropping the ball for them and for yourself. You’ll risk financial loss and damage to your professional reputation, and open your business up to lawsuits and even potential shutdown.
And if you think those potential pitfalls aren’t enough of an incentive, consider what the benefits of a strong risk-aware culture could do for your business. Proactive risk mitigation can lead to better decision-making, improved efficiencies, increased employee engagement, and more new business. How’s that for a bottom line?
But wait, what is a risk aware culture?
Let’s back up for a second and clarify what it means to have a risk aware culture in your tech company. It’s an employee mindset — a workplace way of life, if you will. Having a risk aware culture means that everyone in your organization shares a responsibility to proactively identify, assess, and mitigate risks. In sharing these duties it can enable your team to take an agile and proactive approach to risk mitigation, which in turn can help enhance employee accountability and improve outcomes.
How to build a risk aware culture in your tech company
Anyone can cultivate a risk aware culture in their business. It just takes a plan — after all, a goal without a plan is just a wish. Here’s what you can do:
Conduct a risk assessment
In order to improve your current culture you should first understand and measure your existing risk culture. You’ll want to audit your best practices, protocols, and procedures. Create a detailed list of your processes, and consider an employee survey to assess their understanding and identify any knowledge gaps.
Examples:
- A software company could assess risks related to usage of its open-source code. That could include analyzing the licenses, dependencies, and security vulnerabilities of the open source components they rely on to identify potential legal and operational risks.
- A tech hardware company would want to look at risk areas like product hazards, supply chain issues, environmental impact, and so on.
No matter the type of technology company you are, be sure to also include current planned responses to risks, like say in the event that a cyberattack is successful. What would you plan to do as of today?
Instill leadership commitment early on
Be sure to set an example from the top-down. Stakeholder engagement is an essential component to overall adaptation. This shared responsibility can improve cross functional collaboration and may help bring in diverse viewpoints that can enhance team problem-solving abilities.
Examples:
- Your Chief Technology Officer (CTO) may personally advocate for comprehensive cybersecurity initiatives, risk management software, and other tools to help the company identify, assess, and mitigate risks more effectively.
- Meanwhile, your Chief Executive Officer (CEO) could publicly emphasize the importance of data privacy in all company meetings and communications, and allocate budget for the above-mentioned software.
Invest in tools and resources
Great risk mitigation strategies aren’t created in a vacuum. Don’t be afraid to enlist third party help when conducting an assessment or when mapping out a new plan. You can also lean on risk management tools which can aid in data protection, business continuity, and future security measures.
Examples:
- A robust project management tool can help your company track project progress, identify potential roadblocks, and proactively manage resources to minimize the risk of delays and cost overruns.
- It’s also generally a good idea for tech companies to partner with a cybersecurity firm to regularly conduct security audits.
Create a risk mitigation plan
Once you identify your risks, create a plan for what to do when those events occur. The plans you make now can prove to be invaluable when you’re most in need.
Examples:
- If you experience a data breach, your detailed incident response plan should include procedures for identifying the source of the breach, containing the damage, notifying affected parties, and restoring data.
- To help minimize product-related liability lawsuits, your risk mitigation plan should instead include rigorous testing protocols, instructions on proper usage, and a system for quickly addressing and resolving any reported issues.
In either case, be sure to seek employee buy-in when creating these plans and don’t be afraid to reinvent your procedures over time. Once your new plan is in motion, observe the impact from quarter to quarter. An integrated dashboard can be useful in keeping progress or challenges to progress accessible.
Train and re-train employees on a regular basis.
Whenever new protocols are introduced be sure to inform your team — they are your best line of defense against the risks your business may face. And as your plans and strategies change, ensure that your employees are kept in the know.
Example:
- If your company has remote employees, you’ll want to implement mandatory and ongoing training on data privacy and secure remote work practices.
Your training could cover topics like password management, phishing awareness, and proper handling of confidential data on personal devices.
3 signs your tech company’s culture is risk aware
Once you’ve taken the necessary steps toward establishing a risk aware culture, you may wonder if the work you put in is paying off. Here are three tell-tale signs that your team is on the right track:
- Employees consider risk in all activities, from strategic planning to day-to-day operations, in every part of the organization.
- Your team demonstrates the collective ability to manage risk more effectively and this ability is continuously improving.
- Individuals take personal responsibility for the management of risk and proactively seek to involve others when that is the better approach.
Tips for getting started
So is creating a risk aware culture easier said than done? Maybe, but it will be worthwhile. Put in the necessary time yourself, but don’t forget about involving your team in establishing these strategies. They’ll likely think of vulnerabilities you might not think are as important — and in this case you’ll want to begin by acknowledging the full scope of risks.
Lean on your team, but don’t forget about third party assistance too — and that includes your insurance provider. In the event that a risk becomes a reality, cybersecurity insurance and other tech-specific policies can be your go-to solution.
To learn more about your industry-specific risks and challenges, check out our blog about top 10 tech company risks (and how to mitigate them).
