Internalizing the risk culture; the only medicine against black swans

Tom Kamaliki | 2nd June 2020

Productivity
Internalizing the risk culture; the only medicine against black swans

Internalizing the risk culture; the only medicine against black swans

Tom Kamaliki | 2nd June 2020

Productivity

Kindly forgive me. I’m not privy to any warning that other religious leaders might have shared with their led but for me, my elder brother Emmanuel from a small village of Nazareth assured me over 2000 years ago that he’ll come back like a thief just to find out if I have put in place measures of preparedness to receive him.  

 

Whether you subscribe to this school of thought or not is not an issue here but the message I’m trying to pass across is ‘as employers and top leadership in management, what measures have we put in place to ensure preparedness against unforeseen risks?

 

A Black Swan is a large water bird species of a swan which breeds mainly in the South-East and South-West regions of Australia. Within Australia they are known to be nomadic, with erratic migration patterns dependent upon climatic conditions. The main characteristic with the Black Swan that we need to be wary of is its ‘nomadic and erratic migration pattern’. Being erratic simply means being unpredictable.

 

 The year 2020 has experienced two serious calamities that we can associate with the Black Swan ie the invasion by the locusts and COVID-19. These two ‘black swans’ have caught the entire world unawares, hence resorting to fire fighting and yet in 1918 the world experienced H1N1 virus flu which recurred in 1958 and 2010. The one for 1958 claimed 2 million lives worldwide while the 2010 one claimed the lives of 12,000 Americans.

 

The H1N1 should be experiences for us to have built on to put in place risk mitigation strategies to combat COVID-19. There are several other Black Swans that attack organizations. However, the concern is that when an organization enjoys a successful track record for months or even years, management and staff tend to become overly confident, which can result in a deterioration in risk culture, subjecting organizations to great danger when the black swans strike without notice. This finds management unawares with no idea of how to deal with an abrupt crisis. It is projected that COVID-19 will cost global economy $1.1 trillion in lost income. About 47 million jobs have gone and the ultimate figure previously estimated is 195 million jobs on the line. Come to think of it.

 

The solution lies in organizations internalizing the culture of risk mitigation. Prevention is better than cure. 


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