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May 2013
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TD Magazine

Leaders Miss Vital Clues to Manage Company Risk

One in eight workers puts his company in peril, according to a new study by talent measurement firm SHL. Identifying risky behavior and the sectors and levels at which it is likely to occur can inform talent management programs and risk management strategies.

The study identifies eight behavioral risk components:

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  • leading and deciding
  • supporting and cooperating
  • interacting and presenting
  • analyzing and interpreting
  • creating and conceptualizing
  • organizing and executing
  • adapting and coping
  • enterprising and performing.

Lower compliance and attention to detail, and lower commitment and teamwork are counterproductive behaviors that lead to organizational risk. They increase errors and accidents, affect customer service, and incur costs associated with absenteeism and performance management.
Behavioral risk decreases as seniority increases, with one in 15 executives posing a high risk. Further down the organization, team leaders and individual contributors present more than double the risk of executives. However, frontline employees often are blamed for company crises and accidents that occur when leaders miss vital risk management clues. The gap often is at the middle-manager level, the interface between strategy and operational execution.

Appetite for risk is measured by qualities such as taking initiative, having the confidence to make tough decisions, and persevering to achieve a goal. Resilience to risk involves decision quality, communication quality, and decision follow-through.

These factors set the tone for the standard of behavior a company can expect employees to adopt. At the frontline level, additional components include compliance, quality, commitment, and teamwork.

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About the Author

The Association for Talent Development (ATD) is a professional membership organization supporting those who develop the knowledge and skills of employees in organizations around the world. The ATD Staff, along with a worldwide network of volunteers work to empower professionals to develop talent in the workplace.

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