Gaining Perspectives on Risk
Years ago, my friends and I liked to play the game “Risk.” In some ways, it was a great perspective. You got to see the whole world in one view – all 42 countries and 7 continents. You could quickly see where your opponents had more armies than you, placing you at a greater chance of losing. You also had limited resources to deploy.
Everyone had enough resources and equal visibility to the board, so the winner was truly the one who had the best strategy and the most luck! After all, there were dice involved.
The risks we face now as risk professionals are very different. We don’t have a clear view of every threat, and we don’t always have time to strategize when a specific risk emerges. Needless to say, we have limited resources to deploy as well.
I was very interested to read the 2022 Risk Predictions from the Institute of Risk Management. Their focus even in the title is clear – Resilience, Risk and Recovery. The data is compelling, and this is a must-read for any risk and compliance professional. The report confirmed for us at ETHIX360 that our strategic direction in moving our clients from a purely reactive model to a proactive model helps mitigate risk, reduce the cost of exposure, and moderate responses by focusing on prevention rather than intervention.
Logic would dictate that advance warning of a threat allows orderly and efficient preparation – much like the cliché, “an ounce of prevention is worth a pound of cure.” Given an ever-increasing global threat level, and more compliance issues than ever before with more emerging every day, advance warning becomes the single most critical step companies can take to aggregating risk and threats into a single view, ranking and stratifying them, and deploying precious resources – people and money – at addressing them before they manifest into a full-fledged crisis.
This movement from passive case management, which has been the status quo for decades, into active case management, which is the emerging best practice, does not happen by mistake. Passive case management exists because of the law of three monkeys – if I SEE no evil, if I HEAR no evil, and if I SPEAK no evil, then there is no evil. Naïve is an understatement. If you are reliant on voluntary reporting to become aware of an issue, you are living by the law of the three monkeys. Sadly, this is how 99% of companies operate! They are reliant on employees or other constituents reporting something that happened to them or something they witnessed happening to others.
Did you know that when a sexual harassment incident is reported by the victim, there have typically been at least 5 occurrences that went previously unreported between the same victim and perpetrator? Imagine if the company had become aware of the first occurrence! Training and intervention might have diffused the situation. Just being aware can lead management to move towards a less permissive environment and a zero-tolerance policy. Waiting for the 5th occurrence allows patterns to develop, liability to multiply, and the environment to become toxic.
At ETHIX360, we’ve consistently focused on helping our clients widen their aperture towards emerging threats to be able to take steps to stop incidents before they reach toxicity or a point of reputational damage. Before they become culture killers and before they set a new record for an award paid out.
Not sure how many armies your Risk opponent has in a neighboring country? Not sure where to deploy the 5 new armies you just got this turn? Counting on luck or gut instinct to guide you to manage the effectiveness of your spending? If those thoughts resonate with you, stop living the law of the 3 monkeys, and step up to active case management to plan for emerging threats and mitigate them, sometimes stopping them in their tracks, instead of waiting to react to a crisis.
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MEET THE AUTHOR
J Rollins is the co-founder and CEO of ETHIX360. J is a well known leader and innovator who has served on senior leadership teams ranging in responsibility from Chief Revenue Officer, Chief Marketing Officer, SVP of Product Strategy and Chief Operating Officer.
ABOUT ETHIX360
At ETHIX360, our goal is simple: to provide an affordable, flexible, and comprehensive answer to employee communication, policy management, corporate training and case management on issues related to corporate ethics, code of conduct, fraud, bribery, and workplace violence.
