Risk Mitigation

Risk Mitigation

 

Davide Gronchi shares an article on risk mitigation that includes his pragmatic method designed to drive out ‘failure-mode and effects analysis’ designed by the U.S. military in the 1940s. 

Whilst in the middle of an heavy and unexpected crisis, company leaders are requested to keep looking far ahead and shape the future of their company by (re-)designing the strategy and how to implement it.

Current times are full of worries and threads, every day are more negative than positive news that capture our attention. How to concentrate on our business, sailing in calm waters and heading to a bright future? Yes, company leaders must keep this attitude! Nobody else can do this, it cannot be delegated. And recent research proves that CEOs like crafting strategy most than other task their are responsible for!

Nevertheless, we are all prone to see risks everywhere now during the COVID-19 crisis. This was a risk that nobody was really ready to mitigate. Nobody actually ever thought it could ever been real!

In our life of leaders, in our companies, many can be the risks that we might face and that need to be considered and need a mitigation plan. How to identify and prioritize risks?

I apply a good pragmatic method that derives out of FMEA. FMEA stands for Failure-Mode-and-Effects-Analysis and was invented by the US military in the late 1940s. I am not going to describe in detail what that is (there is plenty of literature around it), but I want to describe how I use this to prioritize risks. The beauty of this approach, is that it helps to put some objective criteria into an exercise that could else be very theoretical and subjective. FMEA is a semi-quantitative evaluation.

 

Key points include:

  • Severity
  • Occurrence
  • Detection

 

Read the full article, The pragmatic way for Risk Mitigation, on LinkedIn.

 

 

Martin Pergler summarizes the assessment of comparative risk levels from two recent press articles and compares them to simple-minded risk assessments to identify the value of the information. 

As we gingerly try to “unfreeze” economic and social activity after this first wave of COVID, there’s a lot of prognostication what formerly normal activities are more or less risky. Two recent U.S. press articles thoughtfully assess comparative risk levels, but also fall into several pretty typical risk assessment traps. What did they do well, what could they have done better? (This article focuses on methodological lessons learned and risk management best practice. Apologies; I have nothing to add as to how risky it truly is to have your hair cut next week!)

The New York Times surveyed several hundred epidemiologists when they expect to feel personally comfortable doing 20 activities. So e.g. only 3% expect to feel comfortable attending a sporting event, concert, or play this summer, 32% in 3-12 months, and 64% in more than a year.

 

Points covered in this article include:

  • Analysis of commentary
  • Assumptions about risk mitigation
  • Risk assessment

 

Read the full article, COVID risk by activity: how to (not) do risk assessment, on LinkedIn.

 

 

Vik Muktavaram applies a few principles of risk management to understand why COVID-19 grew from a risk to a pandemic. 

As the federal government finally took the first decisive step in stemming the outbreak of COVID-19 in the US, the images of serpentine lines of arriving international passengers at airports waiting for immigration and screening for COVID-19 coronavirus ubiquitous online and in print. Presumably, the rationale for the screening was that these arriving passengers represented a high-risk cohort. Yet, the long, crowded lines with no social distancing not only defeats the very purpose of screening but in fact, one could argue that the risk of spreading is increased substantially amongst the ground staff as well as passengers from different airlines. 

As we deal with the COVID-19 pandemic, we should also be wondering how did we miss this when all the signs were there. How did some countries such as Singapore and South Korea manage to contain, if not necessarily prevent, the spread of virus in their countries despite their proximity to China? Risk Management is a structured way of looking at early indicators and prioritizing risks and then managing these risks. As our crisis response continues to be a case study in “how not to”, let’s take a step back to see how the risk (low likelihood, high impact) of a virus-pandemic became a crisis. Mind you, this was not a black swan event. Even as early as 2015, Ebola outbreak provided a harbinger of things to come. Before there is a war, there is a failure of diplomacy, before there is a bankruptcy, there are telltale signs of declining sales, before COVID-19 became a pandemic there was Wuhan and there were several emerging risk indicators.

 

Points covered in this article include:

  • Risk transfer
  • Risk acceptance
  • Risk avoidance
  • Risk mitigation

 

Read the full article, COVID-19 pandemic – How a risk became a crisis in the US, on the Rithym Advisors website. 

 

 

Davide Gronchi provides a pragmatic approach to risk mitigation and shares a method he uses that was invented by the US military in the late 1940s: FMEA (Failure Mode and Effects Analysis) to assess risk under three lenses. 

Whilst in the middle of a heavy and unexpected crisis, company leaders are requested to keep looking far ahead and shape the future of their company by (re-)designing the strategy and how to implement it.

Current times are full of worries and threads, every day are more negative than positive news that capture our attention. How to concentrate on our business, sailing in calm waters and heading to a bright future? Yes, company leaders must keep this attitude! Nobody else can do this, it cannot be delegated. And recent research proves that CEOs like crafting strategy more than other tasks they are responsible for!

Nevertheless, we are all prone to see risks everywhere now during the COVID-19 crisis. This was a risk that nobody was really ready to mitigate. Nobody actually ever thought it could ever be real!

In our life of leaders, in our companies, many can be the risks that we might face and that need to be considered and need a mitigation plan. How to identify and prioritize risks?

 

The lenses for risk explained in this article include:

  • Severity
  • Occurrence
  • Detection

 

Read the full article, The Pragmatic Way for Risk Mitigation, on LinkedIn.