Post by Dr Emma Soane, Assistant Professor of Management at LSE’s Department of Management and Associate Fellow of the British Psychological Society, and Dr Tom Reader, Associate Professor of Organisational Psychology at the LSE.
The pandemic brought organisational risk to the fore.
For risk researchers like us, the aftermath of the Covid-19 pandemic has been a trigger - albeit an unwelcome one - for revising theories on organisational risk.
At its peak, organisations were expected to both take risks and remove them. The very concept of risk was central to rapid culture changes within entire organisations and these were carried out at a scale and pace rarely - if ever - attempted before.
Millions of employees became ‘risk aware’ by adhering to new rules, adopting new ways of working, changing their priorities and engaging in behaviors like testing and reporting that are typically associated with high-risk industries.
It was with this in mind that, together with Professor Rhona Flin, from the University of Aberdeen, and Professor Carl Macrae, from the University of Nottingham, we recently wrote an editorial and commentary in a special issue of the Journal of Occupational and Organisational Psychology on how the pandemic has deepened our understanding of organisational risk and how these insights might lead to future theories on the topic.
Culture change can be rapid if it’s perceived to be easy and useful
The mass culture change during the pandemic was arguably the largest behavioural intervention that has occurred in most people's lifetimes.
The aviation and healthcare industries have all used incident reporting systems to track risk for some time. But for many of us at the time of the pandemic, track and trace reporting, for example, was new. The shifts in working patterns we witnessed might normally have taken years and involved extensive planning and consulting, yet they occurred in weeks and months.
Of course, the situation was unusual, and people's organisational behaviour was tied to their well-being and that of their co-workers. But, we have seen that when people see a clear, compelling and present danger to them and their organisation, culture change can be incredibly fast.
Too often, employers ask employees to change their behaviour and ways of working for reasons that can seem unclear or to the benefit of others. In the case of the pandemic, the culture change we witnessed was made as easy as possible for us. Organisations supported us to make changes both in top-down and bottom-up ways, by, for example, giving us Covid-19 tests and by moving meetings and processes online.
Indeed, because organisations have found it hard to make a similarly compelling reason for people to switch back, the culture shifts on working practices that have arisen through the pandemic have become baked in and difficult to reverse. One of the unintended consequences of the pandemic has been how difficult it now is to reverse these quick culture changes when we want to. Organisations are engaging consultants and change managers to get things back to the way they were and that is, in itself, highly revealing.
We can innovate, but often we need to be pushed into doing so
Research on risk shows that organisations and employees have the ability - and capacity - to innovate, but are quite selective about how and when they do so.
The pandemic provided a compelling reason to innovate - it was a response to a problem and finding solutions became increasingly urgent as organisations grappled with where the balance for them lay between prioritising safety and delivering services.
One lighthearted example of this was in December 2020, when British pubs were told they could only serve alcohol with a “substantial meal”. Some pubs innovated and served scotch eggs - a boiled egg wrapped in sausage meat, coated in breadcrumbs and baked or deep-fried.
Exactly what constituted a “substantial meal” had been unclear and while pubs were innovating to protect their businesses, Ministers continued to disagree about whether a scotch egg was “substantial” or not.
Many innovative organisations quickly reorganised their businesses and went from supplying other businesses - B2B - to supplying customers - B2C. An obvious example of this was Zoom, which went from being mainly a business communication tool to something most of us used to communicate with friends and family. The company taught millions of new users how it could be a communication tool for our home lives and in schools. Such changes proved the old adage that 'necessity is the mother of invention'.
Some leaders breed creativity in others
The pandemic showed us the huge role leaders have when it comes to creating the environment and psychological conditions that enable employees to try out an idea and take creative risks.
Leaders who provide vision, inspiration, individualized attention and intellectual stimulation allow many more expressions of creative ideas.
This is also the case in those who show humility by understanding their limitations, shortcomings, and mistakes and demonstrate ethical leadership. These leaders allow others to share – and implement – their creative ideas.
A colleague of ours, Dr Dorottya Sallai, an Assistant Professor (Education) in the LSE’s Department of Management showed all the characteristics of a leader that breeds creativity in others. When we went into lockdown, she organised a virtual peer support group to discuss online teaching for anyone interested. It was a great way to share challenges, get inspiration from colleagues, and discuss innovative practices for teaching and learning. She arranged regular meetings, circulated agenda points, and we had opportunities to share ideas so that we could offer a good experience for our students while also changing how we teach to suit the virtual world.
Risk as a lever
The pandemic brought organisational risk to the fore.
One of the key things we have learned is that risk itself is a very powerful lever, even more so than profit is.
With great skill and in the right circumstances, it can bring about culture change, creativity, innovation and much else.