4 Ways “Connection Culture” Improves Risk Management

February 21, 2016
Mike Stallard

In recent years, organizational culture has been cited as a reason for managerial failures at organizations including General MotorsNASANokia, and Volkswagen. Recently, I was asked if Connection Cultures reduce risks faced by organizations. The answer is “yes.” Below are four reasons why.

  1. Connection Reduces Accident Risk

When you think about the five performance advantages* Connection Cultures have, it’s not difficult to see how they would improve an organization’s safety record. After all, people in a Connection Culture have superior cognitive function and are more communicative, collaborative and cooperative and, as a result, are going to be less accident prone. Research supports this view. In 2012, Gallup researched 49,929 business or work units comprised of 1.4 million employees within 192 organizations across 34 nations. Compared to business units with engagement/connection scores in the bottom 25 percent, business units in the top 25 percent had 48 percent fewer safety accidents.

  1. Connection Reduces Liability Risk

The Gallup research cited above also found that compared to business units with engagement/connection scores in the bottom 25 percent, business units in the top 25 percent had 41 percent fewer quality incidents. Quality failures can lead to liability lawsuits and in extreme cases threaten an organization’s survival.

  1. Connection Reduces Reputational Risk

Becky Powell-Schwartz, a crisis communications expert at The Powell Group in Dallas, Texas, has helped me see how Connection Cultures reduce an organization’s reputational risk. This is the case because individuals who feel connected to an organization are more likely to risk speaking up when they observe potential threats to their organization’s reputation. The sooner leaders become aware of an emerging threat, the more time they have to take actions to avoid it or to mitigate damage. A case in point is the recent discovery of Volkswagen intentionally programming diesel cars sold in the U.S. to under-report pollution. Volkswagen’s senior management has said they were unaware of the misconduct. If true, a Connection Culture would have made it more likely that an employee would have brought the misconduct to senior management’s attention when there may have been sufficient time to correct the improper behavior.

  1. Connection Reduces Competitive Risk

In Only the Paranoid Survive, former Intel CEO Andrew Grove describes how several people at Intel fed him information that helped him see that Intel’s Japanese competitors had far superior quality in semiconductor memory devices.  Armed with this knowledge, Grove made the decision to exit the memory business and focus instead on microprocessors. As a result of the decision, Intel’s revenue eventually surpassed the revenues of its next three competitors combined. Employees in organizations where they feel connected are more likely to speak up and become what Andrew Grove described as “helpful Cassandras” (Cassandra was the priestess in Greek mythology who foretold the fall of Troy).

In summary, if your organization creates and maintains a Connection Culture, it will reduce risk and see fewer accidents, fewer quality incidents that could result in legal liability, fewer incidents that could result in reputational harm and a lower likelihood of damage from changing competitive conditions.

*The 5 performance advantages of Connection Culture are as follows: 1: Individuals in organizations who feel connected perform at the top of their game; 2: Employees who feel connected give their best efforts; 3. Employees who feel connected align their behavior with organizational goals; 4: Employees who feel connected communicate to help improve the quality of decisions; and 5: Employees who feel connected actively contribute to innovation.

More From Michael Lee Stallard

3 Ways to Reduce the Risk of Managerial Failure

Closing Your Company's Leadership Gap

Q&A with Michael Lee Stallard: What is a Connection Culture?

Michael Lee Stallard, president and cofounder of Connection Culture Group, speaks, teaches and consults on leadership, organizational culture and employee engagement. He is the author of Connection Culture and Fired Up or Burned Out. Follow him on his blogTwitterFacebookGoogle+ or LinkedIn.

Image courtesy of Flickr user Nell Tackaberry under Creative Commons Attribution-NoDerivs 2.0 Generic. Image has been cropped.

You may also like

Join the conversation