Don’t Forget to Breathe

All air breathing organisms do not need any special process to avoid the risk of simply forgetting to breathe. Mostly, they just do it automatically. And if for some strange reason, they stop breathing, their body very quickly develops a violent response to the lack of new air.

Drinking and eating are not quite so automatic, but it is also unnecessary to remind people not to starve to death, when they have a choice to do otherwise.

Animals, including humans, can be observed to also have many, many automatic risk management behaviors. Fear of heights, startle reactions, fight or flight adrenalin releases, and so on. In fact, if you are at a loss of how to deal with any business risk, just go down the list of human natural defenses against risk and you will get lots and lots of different ideas. The natural environment in which the human species evolved was and remains very dangerous. Risks come at us from every direction. Some are constant (like falling from a great height) and some change all the time (like predators and competitors for resources).

Many business managers will contend that their company has developed automatic systems that are embedded in the DNA of the firm to handle risk. The continued existence of the firm is put in evidence as the primary proof of that contention.

The problem with believing that sort of argument is that while a failure to breathe will send an animal into fits of gasping, and dancing on the edge of a cliff will make most animal’s head spin with a natural fear reflex, there is no noticeable consequences of a business stopping their risk management activities.

There are natural, automatic and almost fool proof mechanisms in animals to prevent them from taking some of the most immediately dangerous risks. There are absolutely none of those in a business setting.

So even if there has been a long history of ingrained risk management actions in a firm, a sudden change in personnel can send all that right out the window.

One way of looking at a risk management system is as the replacement for the natural fail safe mechanisms.

Nature saw fit to add a violent automatic natural reaction to a lack of air to the automatic breathing mechanism that can be consciously overridden. The business risk management traditions can be easily and painlessly overridden, unless there is a good risk management system to make the company gasp for breath.

You might find yourself swimming underwater. You override your natural urge to breathe. There are interesting things to see underwater. But you will find it very difficult to stay under too long. Your body has failsafe mechanisms that means you have to work at it very hard to stay under long enough to really hurt yourself. In fact, the mechanism seems to have such a margin of error that you start to want to come back up when you still have the capacity to get back to the surface.

Companies have no similar automatic mechanism.  When someone fails to do the risk management that they should, usually the reaction is that things look and seem better.  Most often, risk management depresses profits, and reduces choices.  The feedback that is experienced leads the exact wrong direction.

A risk management system is the answer to the problem.  The risk management system needs to have mechanisms to keep reminding employees that they need to follow the system rules.

Risk management is not at all like breathing.  In fact quite the opposite.  A firm that wants to have risk management for the long term will need to have a formal process to remind employees that it is important.  In addition, the importance of risk management needs to be periodically reinforced by statements of support from top management.

Risk management is more like a medicine that a person who feels perfectly fine is asked to take regularly.  Every day, they get up and take this medicine, but there is no obvious indication that the medicine is needed.  Many will simply start to forget to take the medicine.  Stop wasting the time it takes to buy and take the medicine.  Avoid even minor side effects.

On the other hand, things that are bad for your health are give quite positive short term feedback.

The trick is to make risk management become more and more like breathing.  To make it a reflex and to build up the mechanisms that will send out danger signals if someone tries to override those automatic mechanism.

Explore posts in the same categories: Enterprise Risk Management, People Risk, Risk Management System


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