Global Risk Report–Developing Risk Resilience


1.  INTRODUCTION

In my previous posts on the World Economic Forum’s Global Risk Report 2016, I have concentrated on

  • the methodology of the report (corresponding to the Plan Risk Management process of Project Management),
  • the identification of risks (corresponding to the Identify Risks process of Project Management)
  • the qualitative analysis of risks (corresponding to the Perform Qualitative Risk Analysis process of Project Management)
  • the identification of regional risk trends
  • the risks that have changed the most since the last Global Risk Report
  • The Paris Agreement as a risk response to the failure of climate-change mitigation and adaptation
  • The risk responses to  Large-Scale Involuntary Immigration

I think one of the reasons why people don’t study global risks is because they feel helpless in the face of risks which are, after all, global in scope.    Of course, as an individual, there is not much one can in the face of a global risk like that of climate change, but working together as governments and societies, a risk response plan like the one developed in the recent Paris Agreement is a possibility.

That is why I am not enervated, but excited, when reading about risk response plans, because as a project manager, working on teams and directing teams is what I do for a living.   That is why I was glad to see that the Global Risk Report took one of the case studies and spent it not on a prominent global risk, but on identifying those characteristics of teams which were able to successfully navigate past global crises, like

  • The earthquake in Chile in 2010
  • The Ebola outbreak of 2014
  • The earthquakes in Nepal in 2015

The Global Agenda Council (GAC) on Risk and Resilience studied the responses to these crises and came up with the following 4 leadership and institutional values which are important for weathering the storm of a crisis.

  1. Clarify roles and responsibilities—when a crisis occurs, time is of the essence and you cannot waste any time trying to decide who has authority or who is in charge of resources.   All of these roles must be specified in a risk response plan way in advance, and must be clarified through training and exercises.
  2. Develop crisis leadership characteristics—leaders must be transparent, responsible and accountable.   They must be able to articulate to the public a clear path forward in the case of an emergency
  3. Leverage expertise—social networks with experts must be developed in advance that cross professional and institutional boundaries so that these expert “force-multipliers” can be on tap when a crisis rears its ugly head.
  4. Create a culture of integrated risk management—the culture of risk management must span the whole organization, including the supply chains.    One way to create this culture is through the development of integrated planning for such risks.

In my own mind, the disastrous reaction by the Bush administration to Hurricane and subsequent flooding in August of 2005 is an example of the breakdown of many of the above values.   The Department of Homeland Security had cut the Federal Emergency Management Agency (FEMA) budget, and reoriented its mission towards recovery from terrorist attacks rather than from natural disasters.

When Hurricane Katrina hit and the flood came, the immediate response was delayed due to miscommunication and insufficient planning, and the government was not even able to deliver promised supplies and transportation based on those plans.

Effective management of crises can create a force-multiplying effect in a positive direction, but it is equally true that ineffective management can create a force-multiplying effect in the other direction.

That’s why I recommend to all risk managers to read Box 1.5 on page 19 of the Global Risk Report to see if the values listed there are reflected in your own organization.    If not, why not create such a culture?   You may be thinking, I am just a drop in the ocean, but consider this:   what is an ocean if not just a multitude of drops.    By yourself, no, you cannot do very much, but if a multitude of drops work together, they can become a tsunami of change within the organization that can enable it to withstand any storm, on the physical or economic front.

 

 

 

 

 

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