How do you match your risk tolerance with your company culture?

1 Assess your risk profile

The first step is to understand your own risk profile, which is a combination of your risk appetite, risk capacity, and risk attitude. Risk appetite is the amount of risk that you are willing to take to achieve your desired outcomes. Risk capacity is the amount of risk that you can afford to take without jeopardizing your financial stability or reputation. Risk attitude is the emotional and psychological response that you have to risk and uncertainty. You can use various tools and methods to assess your risk profile, such as surveys, interviews, self-reflection, or psychometric tests.

2 Understand your company culture

The second step is to understand your company culture, which is the collective risk profile of your organization. You can use various tools and methods to understand your company culture, such as surveys, interviews, observations, or audits. You can also look at indicators such as your company's vision, mission, values, goals, strategies, policies, procedures, processes, systems, structures, roles, responsibilities, rewards, incentives, feedback, and learning. You can analyze how your company culture influences the risk behavior and performance of your organization, such as how it encourages or discourages risk-taking, innovation, collaboration, or accountability.

3 Identify the gaps and opportunities

The third step is to identify the gaps and opportunities between your risk profile and your company culture. You can compare and contrast your risk preferences and perceptions with those of your organization. You can also evaluate how well your risk profile aligns with your company culture in terms of your fit, contribution, satisfaction, and growth. You can identify the areas where you have a high degree of congruence or divergence, and the implications for your risk management and decision-making. You can also identify the areas where you have room for improvement or adaptation, and the potential benefits or challenges.

4 Communicate and collaborate

The fourth step is to communicate and collaborate with your stakeholders to match your risk tolerance with your company culture. You can share your risk profile and expectations with your managers, peers, subordinates, clients, suppliers, or regulators. You can also listen to their risk profiles and expectations, and seek to understand their perspectives and motivations. You can engage in constructive dialogue and feedback to align your risk objectives and strategies with those of your organization. You can also leverage your diversity and complementarity to create synergy and value.

5 Monitor and adjust

The fifth step is to monitor and adjust your risk tolerance and company culture over time. You can review your risk profile and company culture regularly, and check if they are still relevant and appropriate for your changing environment and goals. You can also measure your risk performance and outcomes, and evaluate if they are consistent and satisfactory for you and your organization. You can also learn from your successes and failures, and identify the best practices and lessons learned. You can also seek new opportunities and challenges, and embrace change and innovation.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?