Assessing risk along the path of change

05 March 2024

Adapting to change is hard for any organisation, as we tend to be averse to change due to the risk involved. Yet, as we’ve seen in the last few years, necessity can force big changes that we must navigate to survive and thrive. Change not only poses risk for charities though, but opens up many opportunities.

Managing change usually comes down to 4 key points. Reasoning why. Then, planning, implementation and communication. The latter is a component of every stage to be effective.

Risk management is also a key facet of every stage. It tackles the risks head-on that could later be the cause for resistance. So, including risk management at each stage of the process can help foster a better culture of change.

The primary risk considerations are:

  • Acting in the best interests of the charity.
  • Performing a thorough risk assessment in consultation with key stakeholders.
  • Developing a contingency plan should things not go as expected.
  • Supporting the people and systems affected by the change.
  • Implementing financial controls so you don’t expose the charity’s assets or reputation to undue risk.

This article will go through the risk considerations involved at each step of the change management process.

1. Why? — Assess key risks & opportunities

Change management begins with analysing the current situation, from culture, systems and structure to external challenges and opportunities. You will determine what changes are needed to thrive in the future and meet your goals.

Answering the why question will be crucial to getting the buy-in of stakeholders. You will need to:

  • Show how the change aligns with your clear vision.
  • Consider the effects on stakeholders, partners, suppliers and functions within your charity.
  • Assess the resources you need to make this change happen.

Some of the potential risks will begin to emerge:

  • Losing staff, volunteers, trustees, donors or supporters.
  • Trustee and officer liabilities of negligence, misleading statements or breach of trust.
  • Reputational damage caused by adverse effects on stakeholders or perceived mismanagement.
  • Financial risks of using resources to make it happen.

2. Planning — Performing a thorough risk evaluation

A well-designed change plan is essential for success. Planning will involve:

  • Identifying key stakeholders.
  • Detailing specific changes or actions that need to happen.
  • Communicating the vision of successful change.
  • Developing timeline, budget and communication strategy.

Managing the risks:

  • Perform a risk assessment of the specific risks posed by the planned actions.
  • Identify which risks are insurable, tolerable or manageable.
  • Ensure compliance throughout the process.
  • Approve a budget.
  • Communicate about what, why, how and when the changes are happening.
  • Lead on support for staff, volunteers, or beneficiaries, particularly regarding wellbeing.
  • Create feedback mechanisms to raise concerns.
  • Develop a contingency plan. Will you revert, adapt or have the resources to deal with unexpected costs?
  • Have a crisis communications procedure ready.

3. Implementing change — Mitigating the risks

Good planning will help you roll out the change smoothly and enable you to respond to unexpected issues that may arise.

  • Follow the roadmap you have set out.
  • Communicate throughout.
  • Monitor progress for unexpected circumstances or resistance.
  • Measure the success of desired outcomes.

Mitigating the risks:

  • Use the controls for the risks you have evaluated.
  • Check for new risks arise.
  • Follow contingency plans if required.
  • Practice your duty of care of stakeholders by offering support.
  • Use resources well by keeping to your budget.
  • Inform your insurer or broker of changes you have implemented.

By incorporating good communication and risk management at every stage of the process, the barriers to embracing change can be addressed and minimised.

If you need advice on the risks that need insuring as a result of change, speak to a charity insurance specialist.

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