How can your organization's resilience and risk management align with a culture of innovation and change?

Risk, resilience and innovation are part of the core and culture that set great enterprises apart. When things go awry - and they will do, that core/culture steels the enterprise and its people. They are prepared, galvanised to the storms, and aren’t thrown off course. There’s no wasted energy on blame, there aren’t any calls for heads or recuse, and importantly, its people automatically switch on to focus and fix the problems - either directly or to support those that are. And then the magic really starts - the enterprise and people soak up the learning from the experience and they go beyond learning “what not to do again”, they look to innovate from the experience and make the enterprise stronger.

As the CEO of a management consulting firm, I firmly believe in the pivotal role that resilience and innovation play in navigating today's dynamic business landscape. Resilience, characterized by adaptability and growth amidst challenges, is a cornerstone for enduring success. Innovation, the engine of progress, involves cultivating and implementing novel ideas that meet customer needs. Both these pillars demand a mindset steeped in curiosity, continuous learning, and a willingness to experiment.

In an increasing dynamic environment, staying resilient and innovative are critical to make the most of the opportunity at hand. The last 3 years required businesses and executives to show more resilience than ever. At the same time, organizations that have been innovative have maximized their opportunities and come out not just stronger but also far better prepared to chart their next chapter of growth. Culture plays a key role in building this muscle in the organization - fostering entrepreneurial drive while having a robust risk management approach possibly unleashes a virtuous circle of value creation.

It is extremely important to foster a mindset of continuous improvement, innovation and risk mitigation. A few simple ways to do this is to implement agile methodologies that enable teams to quickly adapt to changes. Forming committees that continuously assess risks of innovative solutions to sharply assess from various angles and collective problem solving/solutioning is a good way to include risk management early in the process rather than a reactive process.

Organizational resilience should focus on value preservation and, if possible, to generate value. It should be supported by a robust and integrated risk management stategy

Risk Management is at the core of Health, Safety & Environment (HSE) management. The initiatives or interventions proposed or put in place is to manage the HSE risks to an ALARP (as low as reasonably practicable) level. Innovations should be part of the continuous process to improve the HSE performance. For example, in today’s world, we are leveraging on Gen AI to improve the monitoring and analytics - such as the deployment of vision AI in line of fire. In conclusion, organizations should integrate innovations in their performance monitoring

In my experience, changing the way leaders speak about risk can impact the overall culture. Instead of only weighing the risks of acting, always also speak to the risks of not acting. Minimizing risk on one side of the equation can greatly increase the impact on the other. Conditional (if...then) risk planning can build in resilience, or the ability to quickly adapt based on initial outcomes. Having a plan B, plan C and so on can also make it easier to move forward instead of getting stuck in risk avoidance paralysis.

One approach I've found extremely effective in integrating risk management and innovation is to develop a 'Pre-Mortem' Approach. Before embarking on any new project or innovation, conduct a 'pre-mortem' analysis. This is a strategy where you imagine that a project has failed and then work backward to determine what could lead to this failure. What this does is, it helps in identifying potential risks early on. By engaging the team in this exercise, you encourage critical thinking and risk awareness, while also fostering innovative problem-solving approaches. It's a proactive way to balance the enthusiasm for innovation with a realistic understanding of what could go wrong, allowing for more robust planning.

From my experience, aligning an organisation's resilience and risk management with a culture of innovation is vital for sustainable growth. Often, companies embarking on growth initiatives face unforeseen risks impacting operational efficiency and team morale. To mitigate this, leaders should foster a proactive culture where risks are viewed as opportunities for creative problem-solving. Collaboration and transparency are essential, as is leveraging technology for efficient risk assessment. Success should be measured in terms of both financial outcomes and the long-term competitive edge, ensuring a robust foundation for future innovation.

Once again, experimentation emerges as the way to handle risk. We take limited risks as an experimentation on a clear scope, and we monitor the results.

Aligning resilience, risk, and innovation is critical for sustained growth. A key strategy is to balance the pursuit of groundbreaking ideas with the awareness of potential risks. This involves fostering a culture where innovative thinking is encouraged, yet grounded in a realistic assessment of challenges and market dynamics. Incorporating resilience in this mix means preparing for and adapting to changes seamlessly. It's not just about taking risks for innovation's sake, but about smartly navigating these risks with a strategic and resilient approach. This delicate balance is the hallmark of organizations that consistently stay ahead in rapidly evolving markets.

It's essential to create an environment that supports psychological safety. Encourage people to take calculated risks, ALLOW errors, foster learning from failures, and share their ideas openly. This will create a space of trust and innovation and will ensure accountability.

The ADKAR model is an excellent way to understand the state of change acceptance. Although each step in the model, on its own seems simple and intuitive, when taken in totality the model helps everyone understand that instituting change is a phased process - not a "one and done" activity. It is also a great tool for quickly identifying next steps - especially when you have a large pool of stakeholders.

The risk management framework defines allowed boundaries within resilience for innovation experiments. Using the details, you can design experiments that fall much within the tolerances of manageable risks. The experiments when fast, cheap, and conducted often help you try and improve faster, better, and longer. Goals and priorities of innovation must be vetted and approved by the management team so that disruptions and resulting outcomes are approved and implementable.

“Constantly testing new ideas is fundamental to innovation. Constantly testing the robustness of a process is a fundamental part of Risk Management. Adopt a mindset of constantly testing and you can do both and better.” -MDNQuality.

I believe resilience and innovation are two sides of the same coin. They are both essential for navigating the complexities and uncertainties of today's world. Both require a culture valuing learning, experimentation, and diversity, enabling organisations and individuals to develop the resilience and innovation needed for success in an ever-evolving landscape.

Change management is a learnable skill and there are several frameworks to implement it. However, openness to change is a cultural value that could be enhanced by choosing the right people during hiring and then by developing a change-boosting corporate culture that fosters innovation. These are some tools that might help: managers should be asking open questions without insinuating any solution from the start, inclusion, diversity and engagement of all stakeholders will bring a richer background to the table, brainstorming enables free exchange of IDEAs, accepting failure without reprimanding while analyzing it as a means to learn and share lessons with the team, setting ambitious goals with a realization level of not more than 60%...

All changes and its impact need to be identified proactively to mitigate risks.Structured process approach is required to implement the change with the help of proper communication,learning and recognition

Being part of major successful transformation projects in healthcare space- the key is to align and partner with the stakeholders to the basics of why, what and how. Once this is aligned, 70% of the job is done. Rest is technical expertise to pitch in and ensure a kink free delivery of the transformation project. To be able to lead transformations successfully, strong knowledge of the operational aspects and its impact on the stakeholders and the customers/ patients is important to continuously mitigate adverse outcomes and burnouts amongst the delivery agents.

More than ever a change-mindset is required in our organisations (it's one of the keys to implementing innovation!). Enhancing change management skills is always to be applauded, and it also needs to be supported. Organisations with leaders who proactively model and reward adaptability, encourage transformation behaviours, and help to remove blockers to change are a large part of change success. Change management skills are very broad, so focus on the change skills that will make a difference to the resilience and risk management outcomes, to people, to customers and clients, and partners.

Having spent a career in driving technology innovation and change in healthcare services - a discipline not known for embracing change well, The primary enemy of successfully moving the organization to the new desired state is most certainly individual fear. This includes fear of looking stupid with new processes or technology, fear of irrelevance (a big one for clinical staff), or simply fear of loss of control. I have found two major tools to be most effective in fostering a culture that can embrace and even drive meaningful change: make the culture demonstrably safe for mistakes and learning, and lead from the front and be physically proximate to the leadership team AND staff teams.

Risk is often viewed as a danger and obstacle but that’s not always the case. To balance risk and resilience with a culture of innovation and change it’s important to reframe risk. Risk must be viewed as an opportunity for learning and growth. Frame innovation as a calculated risk-taking process, where risks are mitigated through smart experimentation. Secondly, it’s vital to embrace resilience: Foster a culture of adaptability and “bounce-backability.” Failure must be viewed as a valuable stepping stone for improvement. Finally, leaders need to champion a culture of open communication, transparency, and psychological safety around risk and innovation. This encourages employees to feel empowered to innovative and embrace change.

In my perspective as a startup Founder, cultivating a culture of innovation and change is about embracing creativity, constant learning, and growth. The culture needs to be embraced and employees provided a safe space where they can share out of the box ideas. If everyone is clear on the WHY (simon sinek) then everyone will be aligned in what the organisation is trying to achieve.

To truly foster a culture of innovation and change, it is imperative to integrate the principles of humility and relationship-building into the organizational ethos. This approach aligns with the concept of 'humble inquiry' as proposed by Edgar Schein. Humble inquiry involves adopting a stance of genuine curiosity and openness, encouraging leaders and team members alike to ask questions that build deeper understanding and empathy. This practice not only demonstrates humility but also facilitates stronger, trust-based relationships within the organization.

Plan well, move fast, fail fast, and go on to the next idea. Decision paralysis will negatively impact creative people. Do not let search for perfection be the enemy of good is a mantra that most organizations should insist upon.

Keeping fundamentals robust and protected while budgeting and setting a framework for innovation followed by empowering the teams to challenge status quo ( or in other words -right culture) is possibly the most critical balancing art that organisations need to practise.

The risk appetite of a company is influenced by the financial metrics of a project. There are other factors which influence the decision like the state of the market, devaluation, competitive landscape and others but from my experience there is an dominating role for Finance as a function which is risk averse. If the financials are good, everyone wants to take the risk. Easy decision. It’s tough when the financials are bad. In many cases, especially for multinationals, the team gets restricted by global standards which don’t necessarily help. Learning how to win in any circumstances and innovating to find a way to make the financials work rather than giving up due to self imposed restrictions is better. Winning in a risky project is fun.

In general, it is observed that for embedding changes such as these, there is a cross-function conflict which actually needs to be cross-functional collaboration, particularly between innovation teams and risk management professionals. Secondly, it is important to ensure that performance metrics defined and aligned with innovation and risk management objectives so that there is no conflict in the minds of employees and they feel encouraged to pursue innovative solutions.

One of the best areas for innovation is from your suppliers (key and strategic). Why look internally when a solution already exists. The trick is asking the right questions and managing the relationships that matter. Often you wont know what it is you looking for until you see it.

In short, rganizations can embed resilience and risk management by proactively identifying potential disruptions, and integrating lessons from setbacks into continuous improvement processes.