The Covid-19 Pandemic has challenged all of our assumptions about the effectiveness of everything. The things we have taken for granted have proven to not be so. The depth of the crisis, rather than the crisis itself, was not contemplated.
This gives us the opportunity to question many things, among them our assumptions about the effectiveness of our organisations more generally.
We believe that many organisations often pay lip service to risk management. They simply don’t challenge their assumptions and often have a level of overconfidence with their understanding of risks and the effectiveness of the associated controls.
There is little awareness of the many cognitive biases that are always at play when considering likelihood and consequences of risks (i.e. don’t trust everything you think!).
And the ‘old hands’ that are often called on for estimates of just how bad things might get, are seldom ‘calibrated’ to understand just how overconfident their predictions can be.
Whilst Covid-19 is at the extreme end of the spectrum in underestimation of consequences, it presents as an example of the thinking that pervades Boards and Risk Committees at many organisations. Of most concern is that we see this often at companies where investors would expect a far greater level of maturity.
But all is not lost! At ABM Risk Partnership, we believe that ‘from risk comes opportunity’.
Organisations that adopt the learnings of the Covid-19 pandemic by challenging the prevailing business culture and the effectiveness of risk management will create a strong competitive advantage going forward. The ability to respond to the threats that present in the future doesn’t mean applying a handbrake on the business. Quite the opposite, risk management is an enabler that promotes taking advantage of opportunities and being a willing supporter in the organisation achieving its objectives.
For an obligation free conversation about your risk management program, please contact Anthony (0404 829 040), Brett (0438 435 545) or Tony (0401 718 481) or via the contact details on our website: www.abmrisk.com.au