Risk Culture, Governance and Operational Resilience in Crisis Management

Speaker A: Roose makes a direct link between culture and resilience. He refers to the idea that culture eats strategy and extends it. In his words, culture eats resilience. The point he makes is practical. If people do not bring forward early signals, if information remains filtered, and if ambiguity is held back, the organization loses time. Welcome back. You're listening to the Download where I share Bad Sign's insights from her latest interviews. This highlight comes from a conversation with Bruce McKindo where we explore how risk, culture, governance and decision making interact under pressure. He explains why governance structures often appear robust with clearly defined roles, escalation path and decision authorities. This structure provides confidence in normal conditions. Under stress, the challenge shifts. The issue becomes speed, integration across functions and the ability to act in conditions of ambiguity. He also describes how oversight can become counterproductive when it prioritizes certainty, presentation quality and control over early escalation and learning.

Speaker B: In the strategy world, Peter Drucker had the state saying, uh, culture eats strategy for breakfast. Right. And I say in the resilience business, culture eats resilience for breakfast. Lunch ended, right? Culture is like critical to that. That this, you know, open and, and, and free environment to be able to bring these weak signals forward is what really can make a huge difference. Absolutely.

Speaker A: And if we build on that, there's a connection to governance as a result and how an organization makes decision, whether it's in normal time, which usually is, I would say, non problematic, versus in stress time, where it's usually where things start getting wrong. So many organizations build governance structures designed to manage disruption. Right. And we have playbooks, crisis management, recovery plan, etc. Where do these structures appear robust on paper, but really struggle under real pressure, under real crisis?

Speaker B: Yeah, well, you know, they tend to look robust and strong, uh, in areas when you have uh, you know, a charter and you have committees and you have roles and escalation paths and even decision authorities, you know, are all in, you know, clearly documented. And that's what gives leadership kind of that false confidence. It's like, well, we got this right, we went through all this, we even ran an exercise, right? And uh, so the problem is that, you know, these structures are designed for orderly oversight and uh, not fast moving ambiguity. Uh, to some degree, what we've been dealing with in the last, you know, five or six weeks now, you know, the lead up to, and then the actual uh, kinetic engagement, right? And uh, you know, it's not that it wasn't there, there was just ambiguity around and some of it through, you know, ops, you know, opsec and psyops creating ambiguity in the lead up. But everyone kind of knew that this was on, heading in that direction. But even then I saw major companies that did not take those early actions, like, didn't even do like a people accounting of like, who, who do we have in country right now? Right. They could have done that weeks ahead of time and then they're scrambling in the, in the fog of war. So you know, it's like what, you know, what often doesn't break down is the governance, but it's the operating speed, its ability to integrate across the functional and data silos. So, you know, structure, as I said, may look robust because, you know, every function has a role, every, you know, the, the decision authorities, all of that. But what I see is that the mechanisms for bubbling up before you kick all of that off, it doesn't exist. Um, and it's culture, it's fragmentation of functions, it's fragmentation of data just all sits out there with gaps and seams where all of this stuff happens and forms.

Speaker A: And to that effect, when you think about oversight, are there forms of oversight that unintentionally, uh, really are slowing down adaptation or suppress early warning signals in the ability to respond?

Speaker B: Sure. And that's what I'm saying is that oversight becomes counterproductive when it prioritizes control, certainty, presentation quality, uh, over learning and adaptation and timely escalation and cultural space. Right. And, and, and, and trust. So you know, if, if people feel like they have to have a fully supportable, validated story before they take something forward, by definition you've just delayed all of that that they built that with. Right. What you want to do is you want to get into that decision cycle in a, in a fused environment, a bridged environment, so everyone can kind of look at it to become aware earlier. Right. So, um, you know, uh, and I see this even at board meetings, you know, the teams come in there and they report what's, you know, tidy and mature and defensible and largely what people already know. Right. That are sitting there in the board or a senior executive team. They don't want to walk in there with messy ambiguity, possibilities contested, you know, they don't want to bring that into the, into the room. And that's, that's what I feel like is the biggest change that we need to see in risk and resilience driven by, you know, culture and accepting that, uh, that's what the world is. It's not clean.

Speaker A: Governance structures define roles, escalation, path and decision authorities. They do not determine how information moves and how quickly decisions are made. That depends on culture. For chief risk officers and leaders, this places emphasis on how early signals are surfaced, how, uh, ambiguity is handled, and how quickly teams can engage before issues are fully formed. That is where operational resilience and crisis management capability are shaped. Listen to the full conversation with Boss Makindo on Apple Podcast, Spotify and @avk.com.