Sometimes, when managing risk, we need to be creative – and have a bit of fun. Sometimes, there just isn’t enough past history to be able to analyze risk effectively – and high-impact, low-likelihood risks are a good example. But what about multiple high-impact, low-likelihood risks happening at the same time?
Clearly, a completely different approach is required.
So I’ve been theorizing about how to treat risk emanating from multiple extreme events simultaneously, where prevention is way, way beyond the scope of the organization involved. Think tsunami, earthquake, asteroid collision all at once.
Allow me to demonstrate by use of a Venn diagram:
Then it dawned on me: forget the risk events and causes for the moment. Identify common impacts, and direct scarce resources to mitigate their effects. Regardless of whether it is zombies, aliens or evil robots that attack, if we can truly understand the risk and identify risk mitigation strategies that address the impact – death to humans! – our risk management dilemma is solved.
Okay, there’s no such thing as Zombies, Aliens and evil Robots.
I get that. But let’s examine a real-life situation: British Columbia’s support to the 2010 Winter Olympic Games in Vancouver.
PRE-OLYMPIC BID: THE YEAR 2000
- British Columbia had experienced eight consecutive years of employment growth and a consistent annual growth in GDP of over 5%;
- The 9/11 attack on the World Trade Centre (2001) hadn’t yet happened, nor the Madrid train bombings (2004) or the London Underground bombing (2005);
- World-scale tragedies and scares like SARS, Bird Flu, Indonesian Tsunami, and Hurricane Katrina hadn’t happened and had no recent precedence; and
- Annual snowfall at Cypress Mountain averaged almost four meters.
WINTER OLYMPIC GAMES YEAR: 2010
- World markets and governments were well into their second year of the global sub-prime mortgage crash fiasco;
- The B.C. government went from a $4 billion budget surplus in 2006/07 to a budget deficit of $2.7 billion;
- Terrorism was now a household word; Canada had troops fighting the Taliban in Afghanistan; Bin Laden had explicitly targeted Canada; the “Toronto 18” had been arrested on Terror-related charges; and we had grown accustomed to unprecedented travel security measures;
- The H1N1 pandemic was declared by the World Health Organization in early June 2009 and remained in place until August 2010, well after the games were done; and
- January 2010 turned out to be the Winter Olympic Host City’s warmest in 35 years and one of the main venues, Cypress Mountain, was closed to the public due to lack of snow.
STILL DON’T BELIEVE IN ZOMBIES, ALIENS AND EVIL ROBOTS?
Okay, but the point is that high-impact, low likelihood events do happen. They happen all the time, and they often happen at the same time. They happened to the huge project I was risk-managing, provincial support to the 2010 Winter Olympic Games.
If you don’t have an effective risk management process in place, you might as well be facing zombies, aliens, and evil robots. Contact us at Enlightened Business Risk Solutions: we’ll help you survive, and thrive. Game On!