It is easy to operate a business in a stable environment. Businesses can ignore a few risks because they know that in the grand scheme of things, they will be fine. However, a crisis like the current coronavirus outbreak completely changes the equation. Businesses are currently reeling from the impact of the outbreak because they cannot cope up with the dynamic nature of this emerging risk.
The coronavirus outbreak’s risk is something known as the black swan in the world of statistics. The story goes as follows – swans are always white; thus, everyone can bet on the swans being white. No one will ever lose money if they bet it on swans being white. However, explorers ended up discovering black swans in Australia. The idea behind the black swan is that sometimes things that are statistically improbably will become reality. That is just how things work. Some things which should have never happened will end up happening.
The coronavirus outbreak can be considered a black swan because nothing like it has been seen in the modern era and no one could have predicted it. The government in China had no idea when the outbreak started because it was a new strain of the coronavirus disease and they had no way to understand how far it will end up spreading. Similarly, governments all over the world found themselves being blindsided. The list of infected countries keeps growing and some of the countries are even talking about a nationwide quarantine. The question then remains – if you cannot anticipate a risk, how can you deal with it? The answer lies in faster risk mitigation activities.
Containing a risk
Once a risk has been actualized – like the current coronavirus outbreak – there is little that can be done to bring things back to normal. What really matters is to take the right decisions at the right time. When you look at all the countries that have been infected you will notice that a few of them seem to be recovering well. The number of cases coming along every day are decreasing instead of going up. The common thing between such countries is the severity of their response. They chose to contain the risk just as the virus began spreading and were thus able to limit its transmission.
Businesses need to look at risk management in the same context. There will always be some risks which cannot be predicted. If a risk cannot be predicted it cannot be prevented either and the only response is to react quickly enough to minimize the damage.
This isn’t just a question of having the right attitude when it comes to risks. The right attitude will only be useful if the right tools are also present. Risk management technology has recently become very common in the financial sector and once you look at the current crisis it is easy to see why that happened. Risk management solutions help businesses quickly mitigate risks by coordinating their actions across the organization under the unified risk management platform.
Businesses also need an activity management solution if they truly want to contain unpredictable risks. The executive branch of the office must be able to control the steps being taken to contain the risk. The problem is that they have no way of ensuring that all the work is progressing at an acceptable pace. They must rely on the reports and information delivered to them by the managers working under them and cannot directly monitor task progression.
This isn’t acceptable for any organization that wants to be able to move quickly. It is essential to have a risk management solution (such as Insight360) that includes activity management. Managers should be able to define tasks and assign them to employees through this system. The executive branch should be able to view the status of such tasks across the organization and be able to intervene wherever required.
The current outbreak tells us that we need to change the way we manage risk and become not just more proactive but also more reactive. Businesses need to ensure that they are ready to deal with a major risk and can quickly implement a plan which would ensure that the business survives the crisis.