Oleh: Dr. Antonius Alijoyo, F.

8th February 2024

Although it sounds like a semantic matter, comparing the meaning of built-in versus add-on is more profound in the attempts to reach a particular organization’s risk culture, particularly its risk culture. What is their difference and how does it matter for us in building an organization’s risk culture. ?

Let us start with a shared understanding of the terminologies. Built-in, refers to an integral and permanent part of a larger construction. It also means that it exists as a natural or characteristic part of something or inherent. On the other hand, added-on refers to something that has been or can be added to an existing object or arrangement. 

Why do I relate those terminologies to organization’s risk culture? This is extracted from conversations with practicing board members and executives who faced challenges in developing a new organization’s risk culture. Due to certain and even good reasons, many are in fetters by the added-on approach rather than built-in. As a result, the entire cycle of developing risk culture becomes limited and less effective than it is supposed to be or expected to ensure the company is culturally fit to face the more dynamic uncertainties and risks of the future.

Whilst we cannot simply say that any approach is always better or worse than the others, it is worthwhile to note that more shortcomings of the added-on approach in developing an organization’s risk culture are well observed. Below is the highlight.

Added-on approach is somehow just adding new things on the existing. As a result, no really new culture is developed as it is just like putting some accessories to our existing cars’ features. It looks good but is not inherently integral to the organization and remains on the surface. Once the leader who initiated the development of a new culture retreats or is dismissed, the old culture will prevail, and consequently, the old ways of doing things will be practiced again. As opposed to the ‘added-on’, ‘built-in’ will help the organization develop a newly fit and integral part of risk culture in facing their challenges and necessities of the future, just like having a new car which better fits the future circumstance and context and even requirements, e.g. Electric car and/or autonomous driving car. 

One self-question arises: “why do many organization leaders who believe that a built-in approach is more effective than an added-on, are still fettered by the added-on approach?” Whilst there is no single answer to this question, one phenomenon could be the common reason, i.e. the temptation to see the quick result. It is just like many of us are tempted to simply use external face make-up to become prettier or more handsome instantly but barely or lack the efforts to build our inner beauty that lasts much longer through consistency and discipline of a healthy lifestyle. 

Subsequently to the question is how to avoid such temptation? One of the most plausible answers is to raise the need and urgency of having a sustainability dimension or metrics of the organization from their strategic goals, performance indicators, good governance and management practices. By having such dimension and/or metrics, the organization would have a visualization of expected culture that fits the challenges and circumstances of the future (note: SDGs – Sustainable Development Goals), pumping the adrenalin to start at their earliest of the underlying level of a new set of culture as the basis of their performance (note: ESG – Environmental, Social, and Governance), and for that purpose, adopting built-in approach rather than added-on. Yet, it requires a change management plan as it might need generations toward such new cultural-fit capabilities to their future journey (note: GRC – Governance, Risk Management, and Compliance).

I hope this short article is helpful, and please see the link for those who are interested in relevant articles about GRC, ESG, and SDGs https://crmsindonesia.org/publications/grc-governance-risk-management-compliance-a-set-of-capabilities-for-embracing-esg-towards-sdg/

Dr. Antonius Alijoyo is the founder of CRMS Indonesia and a senior lecturer in some universities, including IPB, UNPAR, and STMIK LIKMI.

ORCID: 0000-0002-5624-873X, SCOPUS Author ID: 57257965900

Artikel ini juga diterbitkan dan di publikasi pada https://crmsindonesia.org/publications/developing-risk-culture-built-in-rather-than-added-on/