Summary
As a regular contributor to IIRSM's The Sentinel publication, Matthew Wardner this month looks at why horizon scanning for emerging risks is more important then ever.
As professional risk and safety managers, it is part of our remit to warn colleagues of emerging risks before they occur so that preventative action can be taken and the worst effects of the risk can be avoided, or at least mitigated.
In 1987, the US Army War College introduced the term VUCA, standing for volatility, uncertainty, complexity and ambiguity.
As we sit at the start of 2024, it would appear that the world has never been more vulnerable, uncertain, complex or ambiguous, with examples including:
- Swedish Ministers warning the population to prepare for war for the first time in more than 200 years.
- In his first speech as UK Defence Secretary, Grant Shapps noted: “We find ourselves at the dawn of this new era – the Berlin Wall a distant memory – and we’ve come full circle, moving from a post-war to pre-war world.”
- Conflicts in Ukraine, between Israel and Palestine, and between Iran and Pakistan.
- Financial shocks continue and the cost of living crisis appears to be a long-term issue.
- Natural disasters reported on a daily basis, with recent examples including an earthquake in Japan and a volcano eruption in Iceland.
- UNICEF reporting that 700 million people could be displaced due to water shortages by 2030. • Political unrest remains high during elections, with Taiwan’s results already announced and resulting in increased tension with China, and the US and UK to follow.
- The threat of a return of Covid or another source of pandemic has not fully disappeared.
While it is possible that some of the stories that we read about are influenced by different agendas, any one of these might be worth consideration by our senior leadership to evaluate them as potential emerging threats, and it is our role to do the initial analysis and to present the facts in an unbiased way so they can be assessed for potential impacts.
However, in our news-saturated VUCA world, has it reached the point that there are so many threats that our audience has become immune to the warnings and regards it all as “normal”? An alternative view is that now is the time for risk management to become even more integrated as part of the efforts of the resilience manager, so that organisational resilience can be used by leadership teams to aid their due diligence. For example, prior to FID on a major project, or the acquisition of a company or asset, and by pension companies and other investors before deciding whether that organisation is a safe bet for our money.
So, if we accept that gaining an audience is a challenge, what are some of the options?
- Introducing a horizon scanning item to the agendas of senior leadership meetings in the same way that many companies incorporate safety moments at other meetings.
- Developing a strategic threat briefing note that is distributed at regular intervals, either monthly or quarterly.
- Nurturing a strategic threats champion who can gain influence when required.
- Lobby for inclusion in assurance teams and to be part of due diligence activity prior to a strategic decision.
What else have you tried that has worked in the past?
NOW IS THE TIME FOR RISK MANAGEMENT TO BECOME EVEN MORE INTEGRATED AS PART OF THE EFFORTS OF THE RESILIENCE MANAGER
