Culture as Inherent Risk
In 2022, the CIPD and Center for Evidence-Based Management (CEBMa) conducted a review into the claim that Organisational Culture is an important driver of organisational success.
The conclusion: "...there is little evidence consistently linking organisational culture to performance, but if such a link should exist, it is very weak and too small to be practically meaningful." (Report reference in my paper).
However, organisational culture is an inherent risk, named as an internal risk driver by the risk-management discipline itself [Institute of Risk Management], because it governs not average performance - where this report says the evidence is genuinely weak - but the probability and severity of adverse events; an exclusionary culture silences the knowledge, warnings and unheard voices an organisation needs to detect its own hazards, and lacks the internal variety required to absorb the complexity of the world it operates in.
I argue there is plenty of evidence which says, inclusion mitigates that risk not as a values programme - which the evidence shows can misfire or quietly preserve the status quo - but as a set of designed, resourced and owned controls...
preventative: anticipating harm across difference,
detective: psychological safety that surfaces problems while they are cheap to fix, and
directive: governance, equitable pay, and duties UK law increasingly mandates,
I argue that, in particular, CQ, Cultural Intelligence, behaviours create the conditions - the culture - so that the residual risk narrows: the catastrophic - and expensive - tail events become less likely, and the voices that would have warned of them are finally on the register, with an owner, a rating and a review date.
If Organisational Culture isn't on your risk register, with inclusive behaviours and systems as it's mitigation, and flipped to be on your opportunities register, you're probably under-insured, and your ARAC needs to get on it.
I've written a paper.
The synthesis of risk, organisational culture, and CQ is new.
You can find it here.
Want something easier to digest than the paper, but takes you through what it says? Try this interactive tool:
