What has the Easter Rising to do with Risk Management?

At Easter 1916 a group of revolutionaries failed to overthrow British rule in Ireland.  After a gun-battle several were killed but more were taken prisoner.  These men were sentenced to death and executed by firing squad.

Many historians believe that this execution was a political mistake.  They say it made martyrs of them, whereas in jail they would have been regarded as failures.  This event poisoned Anglo-Irish relations for generations, making an amicable resolution to the Irish Question (or the British question from another point of view) almost impossible.

This is an example of turning a misfortune into a catastrophe.  It is one of the lessons I did not include in my book “Be Victorious! – Lessons from World War I for business and everyday life”.

Go to: https://www.createspace.com/4875614                                                                    Or http://www.amazon.co.uk/Be-Victorious-Lessons-Business-Everyday/dp/1500327905/

When things go wrong in your business, do you have plans in place for damage limitation or do you pour petrol on the flames?  Perhaps you need to conduct a Risk Management survey.

Risk Gearing.

At a Risk Management Seminar recently, I heard a discussion of Risk Gearing.  At first it seemed a bit academic, but I soon saw that it is very important.

What does it mean?

  • When we try to evaluate a risk in order to prioritise it and/or to decide how much money to spend on controlling it, it is tempting to look only at the immediate cost of the thing occurring e.g. the amount of money that could be stolen in a break-in or the cost of compensating someone who blamed you for his/her injuries.
  • The point is that there might be secondary costs that were much bigger than the immediate ones, such as the damage done to your property in breaking in, the damage to your reputation from the accident, the time and effort you or your staff have to put in so as to sort out the claim.

So What?

Gearing is the ration between the obvious immediate costs and the overall final costs of an incident.  It is important to take the bigger picture into account when making decisions about priorities and the amount you are prepared to pay to reduce the risk.

So get into gear!

Into the Unknown!

At a Risk Management Seminar recently, I heard a discussion of the unknown.  What do I mean?

  • You may know that a variable you are measuring, say, number of accidents, is a result of several other variables which you can also measure, at least approximately, such as spending on Health and Safety, training, overall activity levels … well you can make your own list.
  • Then you find the total number of accidents has gone down despite reductions in all the other variables.  What is going on?  There must be some other variable(s) affecting it that you are not taking into account.
  • If you measure al the knowns carefully, you can calculate the unknown(s).

SO WHAT?

  • Over a period you can see whether there is any change in the  unknown(s).
  • This may help you predict changes in the number of accidents.
  • It may also direct your attention to trying to identify the unknown factor(s) so as to see how you might be able to influence it or them.
  • Even if you can not, knowing the size and importance of the unknown can be important.  It can stop you putting too much effort into managing the known factors, or getting into the blame game if your efforts in that direction are unsuccessful.

So let’s go into the unknown!