| McKinsey Classics | September 2021 |
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| Ever since the great real-estate bubble launched the 2008–09 financial crisis, companies everywhere have attempted to identify, assess, and control business risks more effectively. Many have implemented risk processes and oversight structures to find and correct overleveraging, fraud, safety mishaps, operational errors, and the like before they lead to disaster.
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| Yet risk continues to bedevil many companies that create such processes and structures. Such companies do not, at the same time, strengthen their risk cultures, which refer to the attitudes and behavior of employees in dealing with risk—for instance, their willingness (or unwillingness) to respect risk processes and structures. A strong risk culture doesn’t promote avoidance of risk: companies with the most effective cultures may feel confident enough to take on a lot of it; those with ineffective ones may take on too little.
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| McKinsey’s work and research have found not only that the companies with the strongest risk cultures have specific traits but also that there are effective ways to strengthen them. Read the 2015 classic “Managing the people side of risk” to tap into our knowledge and experience.
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| — Roger Draper, editor, New York |
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| Did You Miss Our Previous McKinsey Classics? |
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| Different kinds of companies need different kinds of chief strategic officers. To learn what kind your company needs, read “Rethinking the role of the strategist.”
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