Risk watch with Alberta QUARCOOPOME: Giving and receiving feedback: A powerful risk management tool (1)

“We all need people who will give us feedback. That’s how we improve.”    Bill Gates

Let’s be honest – the word “feedback” often makes our shoulders tense up, doesn’t it? Many times in life, we brace ourselves for a verdict, for a judgment on our worth, or for the sharp sting of criticism. We’ve been conditioned to see feedback as a red pen marking all the ways we are “wrong.”

Feedback as a Risk Management Tool

In the rapidly evolving financial landscape, banks are facing challenges that require them to adapt and innovate. But amidst all these changes, the importance of trust remains constant. Trust is the foundation upon which successful banking relationships are built, and it will continue to be a crucial factor in shaping the future of the industry. But consumer trust in banks has stalled globally, and factors such as poor customer experiences, privacy and data breaches, and the growth of AI in banking are further straining it.

Despite these challenges, trust is earned when supervisors regularly give and receive feedback from their team, and the absence of trust among workmates  prevent sharing of tips and awareness creation of issues that causes losses in the banks. A manager that puts his or her ears on the ground, giving feedback also receives feedback and bridges gaps that causes mistrust among staff.

Why Feedback Matters in Risk Management

• Early Detection of Issues: Feedback surfaces problems before they escalate into major risks. For example, employees flagging unclear procedures can prevent compliance failures.

• Continuous Improvement: Constructive feedback helps organizations adapt processes, reducing operational and reputational risks.

• Enhanced Communication: Open feedback channels build trust, ensuring risks are reported instead of hidden.

• Learning Culture: Encouraging feedback creates resilience—teams learn from mistakes rather than repeating them.

Giving Feedback as Risk Control

• Highlight Risk Behaviors: Managers can point out unsafe practices or weak controls.

• Promote Best Practices: Positive feedback reinforces behaviors that minimize risk.

• Clarify Expectations: Clear guidance reduces ambiguity, which is often a source of risk.

Receiving Feedback as Risk Awareness

• Identify Blind Spots: External perspectives reveal risks leaders or teams may overlook.

• Encourage Whistleblowing: Safe feedback channels reduce ethical and compliance risks. This is usually difficu

• Adapt Strategies: Feedback from stakeholders helps refine risk management frameworks.

Peter Senge in his book, The Fifth Discipline:  The Art and Practice of Learning Organizations described the kinds of changes managers need to undergo to help their organizations adapt to an increasingly chaotic world.  He emphasized that in building a learning organization, managers need to develop five disciplines.

1. Systems thinking: All employees should understand how the company really works and have the big picture in their mind as well as a picture of their own job and department.  This way, each employee acts in ways that support the whole company.

2. Shared vision: The organization must develop a common purpose and commitment, as well as an overall plan on which everyone can agree.

• Challenging mental models: This is what is otherwise known as ‘challenging the status quo’ and means questioning current ways of thinking and uncovering the deep assumptions that prevent people from adopting new behaviours and thus new and better ways of doing things.

1. Team Learning: People committed to helping the group succeed and work collectively to achieve the overall vision rather than pursue individual goals.

2. Personal mastery: Employees know the job, people, and processes they are responsible for at a very deep level; they experience intimacy with their work rather than detachment.

All hands on deck in a Learning Organization

These five disciplines enable us to make the shift from old-style thinking and ways of doing things to a new paradigm.  The most difficult part, however, is breaking free of the old ways of thinking and doing things.

In our present-day era of lifelong learning, it implies that banks should also become   Learning organizations!  Such an organization should be one that can be defined as one in which everyone is engaged in identifying and solving problems, enabling the organization to continuously experiment, change and improve, thus increasing its capacity to grow, learn and achieve its purpose.  In the learning organization, all employees look for problems, such as understanding special customer needs.  Employees also solve problems, which means putting things together in unique ways to meet a customer’s needs/expectations. All this is Risk management!

In one sense, becoming a learning organization increases the size of a company’s brain.  Employees participate in all thinking activities, including strategy, with few boundaries among employees in different departments or between the top and bottom.  Everyone communicates and works together, creating enormous intelligence and flexibility to deal with a rapidly changing environment.

Giving and Receiving Feedback

This  is one of the key processes within any organization.  Given and received correctly, feedback creates and maintains an organization that is dynamic, positive and forward thinking – responsive to the needs and feelings of its customers and its staff.

Feedback acts like a risk radar—giving feedback helps correct risky behaviors, while receiving feedback uncovers hidden vulnerabilities. Together, they create a proactive system that reduces uncertainty and strengthens resilience.

On the other hand, organizations where feedback is given badly or not at all, have staff who feel undervalued, whose initiative is stifled and whose potential is wasted.  And as for customers – from an organization such as this, customers can never expect more than a second rate service.

Effective feedback

This ensures that everyone’s ideas are heard, and valued – and where appropriately acted upon – and that everyone knows where they are now and where they are heading. So, you can see that feedback is a powerful management tool which in the right hands can represent a massive force as well as an effective tool in risk management.

What is feedback?

One of the most important skills for any manager to master is the giving of feedback.  Done well, it can inform, motivate, even inspire.  Badly done, it can reinforce difficulties, inhibit communication and lead to low morale.

Feedback is making people aware of what they are doing and the effect that it’s having.  It is a tool you should employ often to encourage open communication and team development.  Put simply, if you don’t tell your team that they’re doing well they won’t realize how much progress they are making and may become demotivated.  And if you don’t address areas in which team members are under-performing you will be denying them an opportunity to put things right. feedback is a process through which managers can make their team aware of their overall performance and their progress towards meeting goals and objectives – and as you’ll see later it’s also a process through which team members can make managers aware of their performance and so on.  Feedback is therefore a key communication tool which is essential for team development and success. It is gradually become a major risk management tool.

Taking our cue from the paragraph above we can classify feedback according to its purpose:

• Motivational Feedback is given to praise someone for a job well done

• Developmental Feedback is given to point out areas in need of development and suggest a way forward.

Whatever the purpose of the feedback, the emphasis should always be on the positive.  In truth, all effective feedback is motivating.  You want to motivate your high achievers to go on achieving.  Equally, you want to motivate your lower achievers to improve.

Examples of a fair feedback

“Well Ama, you handled that customer’s query very well … However, you still seem to be hesitant in identifying potential sales opportunities from a query like that one …”

1. How do you think this feedback would make Ama feel?

2. Why would it make her feel like this?

3. What could her manager have done differently?

Ama is unlikely to walk away from this feedback session brimming with confidence is she?  A lot of people associate the word ‘feedback’ with ‘criticism’, and his manager has just reinforced this negative image in Kwame’s mind.

Example of an inspiring feedback

“Well,Ama, you handled that customer’s query very well.  I know we’ve discussed developing your skills in identifying and following up on sales leads before, and I think you’re more than ready to take that step now. We’ll plan some development sessions next week if that’s okay … Once again I was particularly impressed with your communications skills – you developed an excellent rapport with the customer – well done!

You can see that this time Ama’s manager introduces her development needs as a separate topic – so her strong points aren’t devalued.  And he ends on a positive note which leaves Ama feeling good about herself and the feedback process itself.

 By clearly defining the purpose of feedback the team members will know what is required of them and why.

The Risk Management factor

Since risk management is about minimizing losses and frauds in all undertakings of the bank, all staff should be regularly monitored. Prevention is always better than cure. Supervisors in banks which maintain the “learning organization” concept are doing well in giving feedback to their team and encouraging them to identify their skills and knowledge gap. We shall examine some  practical examples next week.

TO BE CONTINUED

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