Risk Intelligence - When crisis hits

In a crisis, we don’t just react blindly to the stimulus in our operating environment – unless we have a morbid fascination with failure. We also should not become paralysed with indecision because a problem is too difficult, we don’t fully understand it, or we don’t like the solution. We need to invest in understanding and risk intelligence.

Good risk management is widely accepted as necessary for business as usual and for helping ensure an organisation is resilient to turbulence and sudden shocks. During a crisis, the need for good risk management is also paramount to success.

Every crisis has the potential to result in tangible, intangible, operational or reputational harm. When we develop understanding and use that understanding, a crisis can be overcome and impacts minimised – or leveraged in the case of opportunity.

What we need to do when crisis hits is to refresh our understanding of our changed (and changing) context to determine:

o   How are our staff affected?

o   What condition are our services and supply chain?

o   How are our other resources?

o   What has been the reaction of our key stakeholders?

o   Are our objectives still relevant or have they changed?

o   Has our risk tolerance or appetite changed?

o   Do we need some supplementary objective to address this turbulence?

o   How much space do we have to find the issues/solutions?

o   What do we need to understand and what resources are available to maintain that understanding?

There are many other factors to consider in understanding the evolving context of your own organisation in a crisis. As crisis leaders, complexity is an issue that needs to be tackled on an ongoing, dynamic basis.

After we have done this quick assessment are we ready to launch into action?

               The answer is both yes and no……..

The reality is that your emergency and crisis plans will already be executed which is great – but don’t think it is the end of the line. You still need to understand the unique complexity of the current situation, identify and manage risks – and yes, every situation is characterised by unique complexity even if a particular type of hazard has impacted your operations many times before.

Understanding is a journey not a destination, in the new context, we need to refresh our understanding of risks we have previously identified, but also identify new risks in the current context. These new risks may have a positive (opportunity) or negative (adversity) impact on objectives. These objectives may be both standing organisational objectives and new objectives developed in response to the crisis. They will also interact in both known (as you have identified) and unknown ways (requiring an adaptive response).

Like a house, success starts with good foundations. In a crisis, when we are most prone to react, follow our intuition and bias we need to step back, create some space and understand - invest in risk intelligence.