Carraghyn - Chartered Directors

Risking It All

So what’s the difference between a rhinoceros and an elephant?  None if they are headed in your direction - you just need to get out of the way and position yourself with something substantial between you and them!  And that, in a nutshell is how many of us view our approach to risk: if it’s big enough to worry about we had better be nowhere near it when it gets close.

Of course that’s not necessarily the best approach, but it sure works - the ‘risk’ is avoided, all happy.  Or so you would think...  The real risks in life are the ones we don’t see, the ones that sneak along that we miss, or the ones that are so unlikely that we don’t perceive them to be a threat.  And that is sadly all too often the situation many an organisation finds itself in today.

But unfortunately the world doesn’t work in ways we can see and predict, and the world does not reward those who adopt the ostrich attitude and just ignore what might happen.  No, the world in fact does the exact opposite, and penalises those seek to get round or ignore the unpredictable.  The moment we step forward ignoring the potential outcomes of our actions, we walk into the unknown without a plan.  Just off the coast of France is a small island now called Le Mont St Michel, a rock really, but a rock on which in the early eight century Bishop Aubert of Avranches had the idea to build a community, with a monastery and church on top.  More than that, he had the vision to see it beyond what anyone could have remotely considered normal planning, he looked into the future and actually planned for this project to be completed - 300 years down the line!  Six generations on, the golden angel on top of the church steeple was set, completing a mans vision that spanned six future generations and beyond.  You can visit it today and see the golden angel.  Well unless you visit on a Manx weather day like I did...  But you get the drift; without vision nothing is ever achieved, and without considering all the likely outcomes and problems, nothing can be completed.  Considering the likely outcomes, problems, options and choices; the possibles and probables, that is the essence of risk management - to complete this project, they were all incorporated into the planning he made just as much as which stone to use and where to get it from.

Today we all encounter risk management, whether knowingly or not, in most decisions we take; for example crossing the road.  Do we a) go? b) stop or c) do something else.  Risk management revolves essentially around these three choices - stop the activity, do the activity or transfer the activity.  You can’t transfer crossing the road but you could use a zebra crossing or a bus or whatever.  In risk management we consider those three options which together become risk mitigation.  But there is something we need to do before we even get to this point...

Knowing what we might do if something goes wrong is great, but in isolation pointless if we don’t work out what the actual things are first!  I might have a great plan for stopping driving if that rhinoceros lumbers into view 100m ahead, but what if I hadn’t planned for the elephant to step out behind and onto me!  Good plan for one but inadequate preparation and planning for the latter.  Risk assessment is key but has to be as out of the box as the activities that surround them.

Today we are in a fluid, fast moving and often lateral environment, where issues we face would not have been thought of even thirty years ago.  Planning for potential system downtime is as fundamental today, as ensuring there was enough space for the ‘new’ computer system in the building then.  And by space that meant a room big enough!  Today we keep our eyes open to internal risk, external risk, supplier risk, competitor risk, legal & regulatory risk, product, customer, staff, and on and on; whilst risking (sic) being seen as a cottage industry, proper risk management is as vital today as the business air we breathe.  It must be embedded in every aspect of our business planning and a regular topic on every Board agenda the world over.

And that is why in all walks of life, whatever our approach to the risks we face, we need to be aware that there are plenty of rhinoceroses and elephants out there, ready to become an issue, and we need to tackle them head on.  Plan and prepare.

And whatever you do, don’t be an ostrich...


Risk Management

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