How does a company organise itself to deal with societal challenges? Non-Technical Risks or those challenges and opportunities related to external stakeholders, have become a normal part of business. These risks are expressions of the concerns, expectations and wishes that stakeholders place upon companies. This is compounded by the external environment becoming more complex and demanding, with a myriad of regulations and with many, often contradicting or challenging expectations. If not well-managed, non-technical risks cause significant project delays, budget overruns and/or reputation damage.
Therefore, for a consistent and equivocal response to external stakeholders, a company needs to streamline its internal organisation.
This paper discusses the way Shell re-aligned its internal organisation to give proper balance to technical, commercial and external considerations in investment and operational decision making. This required management taking full accountability for non-technical risk integration. And, in support, the External Relations department was assigned the responsibility to coordinate and align non-technical risks across the many non-technical functions and to integrate with the technical and commercial teams. The existing risk management process was used for timely identification, assessment, quantification, prioritisation and mitigation of non-technical risks, and full integration in decision making processes.
The key to success is to remain focused on creating well-informed dialogue amongst business decision makers. If that happens, mitigating actions will be resourced properly and will be taken in a timely and proactive manner; investment decisions will be taken with a realistic view on non-technical risks. In the case of Shell, the necessary processes and tools already existed in the company, and only needed better application from a non-technical risk perspective. The real challenge however, was to create a cultural change across the company to:
Improve the cooperation between the various non-technical functions.
Align these functions with capital project and operational decision making.
Ensure managers and decision makers properly value and balance non-technical considerations with technical and commercial ones.
The journey of improving non-technical risk integration is primarily one of changing the company culture. It creates an organisation that is more humble, transparent and flexible in responding to societal challenges and expectations, and, importantly, it creates a company that is better adapted to the demands of society and, as a result, leads to better business outcomes.