As I discussed in the most recent UKG Workforce Institute Weigh-In conversation, one of the topics that organizations don’t spend nearly enough time talking about is risk management. Often, when organizations are doing great, they might say to themselves, “Hey, everything is great. We don’t need to think about all that stuff right now. We can work on it when the operation is slower.” Then, when the operation is slower, the organization puts off working on it because it takes them away from making money.
This doesn’t change the fact that organizations have risks they need to manage. And, those risks are varied in terms of probability and how fast they evolve. The LEGO Group, maker of the iconic plastic bricks, uses a model called PAPA, which stands for Park, Adapt, Prepare, and Act.
Park events have a low likelihood of happening and, if they do happen, they would evolve slowly. This doesn’t mean that the organization can ignore them, but they might be lower on the priority list. For example, an organization currently without a bullying problem might recognize that workplace bullying is being increasingly discussed in the news and decide to evaluate its policies to ensure employees know where to go if they have concerns. HR departments might decide to send out regular reminders to employees about the organizations commitment to an open-door policy.
Adapt events have a high likelihood of happening but a slow evolution. For example, the organization might realize that it is hiring a more diverse workforce — which is a good thing, but that means that the office environment might need some changes to accommodate new physical-space wants and needs. The organization having a more diverse workforce had a high probability of happening. But, because it’s happening over time, it’s possible the organization didn’t see that it might need to make some changes to accommodate its new employees. Those changes might not need to happen all at one time, but the organization needs to put together a plan to adapt to the needs of its ever-changing workforce.
Prepare events have a low likelihood of happening but, when they do, it will evolve quickly. An example of a prepare event might be weather related. While the organization realizes that weather-related events can have an impact on the operation, we don’t always get a lot of notice when faced with a storm. Ideally, the organization wants to prepare a plan that it can quickly put into action. Where I’m located, we sometimes face hurricane weather conditions. In many cases, we prepare for the storm, and it fizzles out before making landfall. But that’s no excuse not to prepare.
Act events have a high likelihood of happening and, when they do, they will evolve quickly. For instance, an Act event might be a workplace injury or accident. While organizations try not to have accidents and injuries, they do happen frequently in some industries. Because of that, the organization needs to proactively take steps to ensure that everyone knows how to act when an accident or injury occurs. This includes having proper training and equipment onsite, creating a response team to deliver emergency treatment, and HR ensuring that proper reporting takes place.
What the PAPA model can do is help organizations prioritize the different types of risk it faces and put strategies in place to address them. The model shouldn’t be interpreted as a low probability, meaning the organization can prepare less or dedicate fewer resources to respond. For instance, the probably of an airline crash is considered to be fairly low, but, if a crash happens, the organization will need to respond quickly and use a tremendous amount of its resources.
As organizations work on their strategic and operational plans for the year, it could make good business sense to start allocating time focused on risk management. Bring the key stakeholders together to list all the possible risks to the organization, and then reach consensus on where they fall in the PAPA model. The organization can focus on its high-priority events (prepare, act) and schedule time to work on the lower-probability ones (park, adapt).
And, depending on the nature of the risk, the organization can assign different people to work on each strategy. There’s no rule that says all risk-management planning needs to happen with one person or department. This could help keep the risk-management conversation from fading.
Organizations that are able to effectively respond to emergencies and risk events can retain the respect of their employees and the loyalty of their customers. But it takes a commitment to planning.
