Revamping Risk Culture: It’s Time For Companies To Focus More On Behavioral Blind Spots
Too few firms give behavior the attention it deserves. The behavioral dimension of a risk culture is often more difficult to detect and address than blatant misconduct. A trickle of low‑level transgressions and oversights can erode a firm’s value over time.
Neuroscience has shown that changing or developing a behavior is different from learning or doing a task. To address the behavioral neural networks where beliefs and habits reside and to “rewire” them, individuals and teams must be taken on a journey led by their company’s board of directors and top management. It is also an integral part of risk culture that should be at the top of every company’s “fix-it” list.
By using data-based tools to quantify and model risk, retailers can assign a value to the unknown, forecast the extent of potential financial damage, and determine what steps can be taken to prevent, manage, or transfer risk. In short, data and analytics can help drive intelligent business decisions and change.