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Turning a crisis into a drama…

05 Nov 2010

Michael Skapinker’s column in the FT was interesting this week. Entitled “Memo to board: we need to talk about BP” (FT Comment and Analysis, 1st November 2010), the initial lesson drawn is that the equivalent of a Deepwater Horizon (BP’s crisis) lurks in every organisation. Think about Enron – or for the public sector think about the data disk lost by HMRC in 2007.

Turning a crisis into a dramaAs Skapinker suggests, one answer (if done well) is strategic risk management (though he doesn’t call it that); people in the organisation able to assess where the potentially grave threats to the organisation lie. But assessment alone is not enough – there needs to be access to the highest level of the organisation. Strategic Risk Management is a Board level concern, but too often can be down-graded to lower levels, paid lip service to (the routine ‘review of the risk register’) or ignored entirely. At it’s most powerful, it should be linked to the ‘horizon-scanning’ function of the strategy team. That is, those people responsible for looking for the lead indicators that might suggest that the world outside is changing. Taken together you have the potential threats to which any Board should pay heed:

  • an understanding of the mission critical risks associated with existing work (either operations and / or projects) and
  • signals about the operating environment in which those operations and projects deliver.

So when was the last time your Board really reviewed it’s strategic risks?

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