People Risk Is Business Risk: What Leaders Often Miss

Every business manages risk. Financial risk. Legal risk. Operational risk. But the most overlooked — and often the most damaging — is personnel risk.

Personnel risk (or "people risk") refers to the vulnerabilities that arise from human behavior inside your organization: misconduct, misalignment, poor leadership, toxic subcultures, or compliance failures that originate with people, not processes or products.

Too often, people risk is treated as a “soft issue” or delegated to HR alone. Left unaddressed, however, these risks can lead to lawsuits, turnover, reputational harm, and deep cultural erosion.

At Sonder Strategy Group, we help leaders see and manage people-centered risk before it becomes a business crisis. Here's what that looks like in practice:

1. Leadership Blind Spots

Leaders don't always see the full impact of their actions or inaction. A manager with poor emotional intelligence, a director who avoids conflict, or an executive who dismisses feedback can create environments where misconduct festers.

The Risk:
Lack of accountability, disengaged employees, and potential legal exposure if complaints are ignored.

The Strategy:
Conduct leadership risk reviews or 360 assessments through a neutral third party. Provide confidential channels for upward feedback. Investigate concerns promptly and independently when red flags arise.

2. Misaligned Values

An organization’s stated values may not match its lived reality. When what leadership says they believe doesn’t align with how decisions are made or how people are treated, trust erodes quickly.

The Risk:
Increased attrition, loss of credibility, difficulty recruiting or retaining talent.

The Strategy:
Assess the gap between your values and your practices. Use personnel risk audits or culture assessments to identify misalignments, then correct course with transparency and accountability.

3. Unchecked Microcultures

Every team has its own dynamics, but some develop into insulated “microcultures” with norms that quietly defy company policy. This is especially common in fast-growing companies, satellite offices, or legacy departments with long-standing leadership.

The Risk:
Inconsistent practices, workplace misconduct, legal exposure, or PR crises if behavior goes unchecked.

The Strategy:
Monitor patterns in complaints, exit interviews, or employee feedback. When concerns arise, engage an external investigator who can assess without internal bias or pressure.

The Bottom Line

People problems are not just “interpersonal issues,” they are operational and reputational risks. By recognizing that people risk is business risk, leaders can act earlier, respond smarter, and protect what matters most: their people, their credibility, and their mission.

If your organization is navigating a sensitive personnel issue, or you're ready to assess where risk may be hiding, Sonder Strategy Group is here to help.