We last week went into a new version of pandemic lock down. The increase in hospitalization attributable to the Delta variant was projected to overwhelm health capacity.
This has people again asking what the true meaning of risk is and how does one prioritize.
Risk can be defined broadly as:
A condition in which there is a possibility that people or property could experience adverse or unexpected consequences.
The trend is showing increasing infections mainly among those who are not vaccinated, and this threatens to exceed capacity. There is a possibility the medical teams will be required to triage some people out of the high care they need, or evacuate them to other places. A serious risk!
On the other side is the possibility yet another lockdown will significantly impact economic and mental health of a large portion of the population
- These people are not presenting themselves to one “system” for help and thus the statistics are more invisible.
- Many need medical assistance – depression, anxiety, drug overdoses, suicide attempts, psychological support, urgent elective surgery, diagnosis of health conditions, etc.
- They and/or others need financial assistance – business forced to close, no job, losing home, unable to afford necessities or medication, consequences of domestic violence.
These people don’t know where to get help; many are desperate. Also a serious risk!
How does one assess and prioritize risk and consequences? These are two LARGE risk groups that work in opposition.
Similarly in business, risk is difficult to identify, assess and manage. How do you do it?
DO you do it?
Public companies are required to disclose risks in their public documentation. I’ve seen many treat this as purely complying with the regulations …. (tick) we wrote about risk.
Risk indicates both positive and negative potential. Risk identification and management is an opportunity.
Business may benefit significantly from a positive risk situation, or by minimizing/avoiding a negative one.
Who saw the pandemic coming? Did anyone plan for the business impact of a pandemic specifically? … Unlikely! Had many companies thought through contingency and disaster response plans that allowed them to take action? … Yes!
There was also a third group. They had not prepared but the pandemic delivered an advantage for their business. With scrambling they responded.
This also brought risk. The response created a change in other focus – progress stopped on research and development, cash management, contracts or negotiations, focus on people, expense and revenue optimization, etc. These all received less attention. Some companies did well and others not.
Make the best of risk
On balance, risks can mean disaster or they can bring significant opportunity. Every cloud has a silver lining.
We NEED companies to take risks. They MUST experiment, try something and see if it works, attempt to solve a need or problem in society.
This is the way we move forward with increasingly newer versions of a modern lifestyle, or stop doing things that have a negative impact.
Identifying risk can be challenging. It can be a fun strategic adventure. But it definitely brings advantages.
How do you identify and respond to your risk? What does your risk matrix look like?