Risk Management Requires Effective Communication

April 28, 2014

Communication is a vital aspect of any company, especially those in the manufacturing, construction and health care industries. 

However, there is a difference between simply communicating and doing so effectively. In few areas is this distinction as important as with risk management. Therefore, executives have to place a significant emphasis on this element, in order to best protect the workplace and create a quality risk management plan. 

Great communication can improve decision-making
A successful risk management plan and related strategies require participation from those within the company, according to Carnegie Mellon Software Engineering Institute and the National Aeronautics and Space Administration. In fact, people may be less likely to communicate risks unless doing so directly benefits them in the short term. 

This idea highlights the importance of great communication at any company, because without it, risks may not be fully understood. Executives who know exactly what goes on in the day-to-day operations will be better at decision-making, as well. They can be more proactive about changes, instead of waiting for something to go wrong then finding an appropriate solution. 

In order to encourage proper communication, companies should have defined business goals, the news source noted. That way, every staff member will understand motivations and desires, and be working toward a common idea of success.

Communication requires teamwork
It takes a little effort from everyone involved to achieve quality communication. However, each step along the way is vital, in order to improve a risk management plan and best protect the interests of a company. 

According to Inc. magazine, language makes a difference. For instance, word choice should reflect a collaborative attitude, instead of a "me first" mindset. It is best to be clear and concise, instead of vague and metaphorical. In addition, employees should also make sure to follow through with everything, no matter how inconsequential it may seem. Failure to take action can lead to negative results, and promises in the workplace should be kept. 

Moreover, everyone within a company should make sure to respond in an appropriate manner, Inc. magazine explained. A quick reaction can often be fraught with emotions, which can lead to mixed signals and confusion. On the other hand, a professional tone can keep a situation calm and help everyone move forward properly. 

Overall, great communication is a must for any successful risk management plan. A company that doesn't effectively talk about risks and other threats will most likely be unprepared, and that could lead to serious problems down the road.

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