The Power of Risk Awareness

Risk Management ServicesKnowledge of your organization may very well be the most powerful tool at your disposal in facing the challenges of sudden changes from crises.  But how is this knowledge gained?

One way is through a cycle of risk assessment, preparedness planning, and disciplined practice.  It takes an extraordinary amount of courage to face the reality of risks, which is why so few organizations voluntarily do it.  But the awareness of risks set apart those organizations that survive from those that do not.  In the 1993 World Trade Center bombing, 150 businesses out of 350 affected failed to survive the event.  Conversely, the firms affected by the September 11 attacks with well-developed and tested Business Continuity Plans were back in business within days. (Howe School of Technology Management 2004)

Without awareness and acceptance of risks, it is impossible to adequately prepare and practice.  How would you know what precisely to plan for?

It is clear to both scientists and practitioners alike, our risks are not what they used to be.  While we’ve always had natural disasters to contend with, experts tell us that a new class of disasters are emerging due to changes in our climate.  As a result, many insurance companies are already updating their risk models.  Further, it was reported in a study conducted by Ceres, a consortium of public interest groups, that most insurance companies “believe that climate change will increase their losses.” 

This shift calls us to awaken new skills, new wisdom, and new practices that will allow us to thrive.  This is adaptation on a massive scale, yet is comprised of details and mundane choices each of us makes every day.  We do not make these daily choices alone, as we are all in this together.

It is important to remember that our awareness and acceptance of risk is a continual and incremental process. One risk assessment is a snapshot in time and begins aging the moment it is finished.  The more people and the more frequently something is analyzed, the more information comes to light.   Risk management, just like every other tool, gets more effective and efficient with practice as results are refined, interpretations of the results are improved, and responses and planning become more effective.  Following this process, it all gels eventually, and when it does, you’ll recognize that risk management will have strengthened and become part of your organizational culture.

Risk Mitigation Tips

  • If your organization includes operations of automated systems, practice manual operations on a regular basis to keep operational skills fresh. 
  • Find more lessons learned from similar organizations to yours, ones that faced catastrophe and survived and also from those that failed.