Risk and Complexity SIG Michael Bartlett, co-Chair Covid-19 has clearly upset all our standard rhythms and caused disruption to physical plans - as well as anxiety to people affected by the explicit hazard or its indirect consequences. As a classic crisis management scenario, we have seen the phases of ignorance, disbelief, individual panic alongside organisational inertia, then over-reaction until a new (albeit forced) equilibrium is attained. The next few months remain uncertain: will the current state hold steady and evolve as assumed or are more seismic shifts to come? What is fascinating to see in the current state is that there are many opportunities to re-evaluate what is important and to benefit from shifting priorities. It will be interesting to see if there is a notable reduction in transport-related injuries and fatalities and what effect the reduction in pollution had on health and the environment. The simple delight of being able to walk around suburban streets without fear of being knocked over cannot be underestimated! There is a massive opportunity for individuals and organisations to reflect on what a new paradigm might look like rather than a reversion to pre-Covid plans and priorities. For infrastructure, this would suggest a radical look at the current philosophy of office working and creating energy-consuming infrastructure primarily for commuting. Over the last 10 years there has been a gradual shift to home working but our response to Covid-19 has demonstrated we can undertake far higher proportions of essential work without leaving our homes than previously thought possible. Surely this should influence transport plans to provide continued encouragement and hence reverse the spiral? Risk managers are well placed to use the next few months to facilitate scenarios for (a) how long the current state may last (b) how the current state could evolve (same, better or indeed worse - maybe a new virus strain emerges) and (c) what might the new paradigm look like for our business - how can we capitalise on what we have learnt so far? Secondly, our response to Covid-19 has illustrated that blind pursuit of capitalist growth where investment in people and support functions is pared to its elastic limit has not been the priority. It has become evident that we must invest adequately in the basic essentials and allow for some “redundancy” as much in organisational structures as in physical structures. This is a strategic parallel of the endemic risk management conundrum: what level of investment is prudent now to reduce possible future risk? At a macro-level, the risk management community has the potential to provide intelligent advice on the real risks of future paradigm-changing events whether Covid-2x, other low probability events or, probably more pertinent, the effects of climate change which is the longer-term catastrophe for all our societal norms. The other facet which professional Enterprise Risk Management (ERM) leaders are well placed to consider is how the Covid-19 experience might suggest a new way of risk management thinking. We can acknowledge that current methods which focus on a team’s subjective identification and evaluation of risk do not effectively consider generic risks or complexities/ interactions. An alternate approach would be a blend of three components: 1. A generic risk profile based on project characteristics 2. A specific set of true causal risks identified by project experts but evaluated by risk experts 3. A model of cumulative impact that reflects that the interaction characteristics of risks are far more influential than the discrete items themselves
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