Managing Risk in Crisis: Conquer Complexity

The following guest post was written by Tony Gimple of risk consultancy Gimple Associates 

Norwegian scientist and explorer Thor Heyerdahl famously said: “Progress is man’s ability to complicate simplicity.” In the modern world, that’s exactly what we do when it comes to both operational risk and business continuity planning.

Even the most experienced board cannot always predict the levels of complexity their actions will incur, and thus the added risk that often results. This frequently translates into an organization's almost obsessive need to plan for every conceivable risk, each with its own discrete solution, methodology or SOP. Similarly, the conflation of operational and continuity risk massively overcomplicates the process and can seriously undermine effectiveness when it's most needed.

As a result of this complexity, organizations can easily fall prey to the butterfly effect, as it's known in chaos theory, whereby one small change could unknowingly result in a large problem somewhere down the road.

I’m not for one minute saying that the modern world should be a simpler place in which to live and work—far from it. Nonetheless, at the start of a crisis, it is vital not to overcomplicate matters. Instead, remember to focus on critical outcomes.

Once risk is mitigated or transferred, for instance, how can your business cope and recover to somewhat of a business as usual? The key here is to concentrate on the basics:

• Be able to automatically divert your telephone system to VOIP. That way, you’ll be able to stay in touch. Lack of contact will kill you quicker than anything else.

• Virtualise your IT systems. Data back-up alone or tape streamers are next to useless, since without the programmes to run the data, you’re well and truly stuffed.

• Contract with an Emergency Management Location with enough desks, telephones, mobile reception and bandwidth for key players. Your local Regus or other offsite workspace provider will do.

• Have a good PR agency on standby. It’s better to be proactive with the press by showing “we’re in control and on top of things,” rather than a lack of response leading to “business suffers crisis” headlines.

Will that solve all your problems? The short answer is no. But these four basic steps will at least give you a fighting chance to get over the crucial first few hours with something like your reputation intact.

Comments

[Jon]

Those are all great tips.

Its amazing the difference between small and large firms and their ability to move quickly.

I have worked for a tech startup where everything was 100% in the cloud and all building/computers could be wiped out and we would be operational again as fast as a new computer could be started.

Whereas when I am now working for one of the largest corporations in the world it can take an incredible amount of time for the simplest IT request.

Interesting post!

[Bill Trueman]

Many specialists, consultants or advisors enter a business and present a 'generic' programme of work for a business in order to solve (or not) a problem, with a rather formulaic solution; and it is just these types of specialists that we want to follow into organisations.