1 Sep How Growing Uncertainty Is Changing How Organisations Care for Their Assets
Those of you that follow my posts will recall that in a recent article, I called for a greater focus on data-driven decision to help mitigate our collective susceptibility to business risk.
This is not to say organisations have necessarily been neglecting the use of data in their decision making. Rather, it is to help them reassess its importance in what is becoming an increasingly uncertain world.
Political agendas, scaremongering and marketing propaganda aside, even the most pragmatic business people can see that the current climate is one of unprecedented risk. Risks to infrastructure, risks to business assets, risks to corporate reputation; the list is seemingly infinite.
Let’s look at the facts.
- An already ill-prepared UK infrastructure is becoming even more vulnerable to environmental risks as interdependencies between networks continue to grow.
- Even if the Paris Agreement agreement meets its emissions targets, climate change will lead to a 20-50% increase in the number of hospitals, roads and railways at significant flood risk.
- In 2015, two of the largest insured losses in the entire EU (including the UK) were due to UK flooding, costing the insurers a collective £1.34bn ($1.9bn)
But it isn’t just environmental risks threatening businesses.
The number of global cyberattacks and data breaches has increased to its highest level in over 10 years. Furthermore, according to a resilience survey from global risk and strategic consulting firm, Control Risks, 62.1% of businesses worldwide regarded political instability as the most disruptive external threat to business over the next 5-10 years. This is a sentiment that only continues to grow in light of Brexit.
However, it is not until we begin to explore the impacts of these risks that we can fully appreciate their magnitude. Take climate change or, more specifically, growing flood risk for instance: for DNOs without long term resilience and contingency measures in place, a flood is more than a flood. It’s potential punitive fines from Ofgem for regulatory breach, it’s the monetary costs of extended periods of downtime, it’s collateral damage to key assets and transformers, it’s the reputational impacts of failing to adequately protect the environment and contain oil spillages within bunds.
So, with the scale of these risks in mind, how do we move forward to stay one step ahead of evolving risks?
As I’ve said before, I believe the answer lies in more than any one bund lining, policy, infrastructural investment or protective measure. It lies in the root cause of the vulnerability: the underlying approach and attitude toward risk as a whole.
In our work with clients we are finding that many are beginning to move toward a more research and feedback driven model – that is, following every disruptive event they experience, they are conducting a comprehensive learning and auditing process.
More specifically, they’re taking an objective look at what helped facilitate a quick recovery, they are looking at what vulnerabilities enabled the disruption to occur in the first place, they are looking at what interdependencies exist within the site and how these can be eliminated to minimise collateral damage and ensure business continuity in the worst case scenario.
This feedback loop is integral for businesses looking to grow their resilience in tandem with increasing uncertainties.
Do not fall into the trap of thinking it should not only be an internal, reactive process though.
Creating a highly resilient infrastructure and business requires a comprehensive and holistic approach. You need to learn from every new incident, including those from outside your organisation. You need to look for areas of improvement before the worst case scenario occurs, such as during the PPM (Planned Preventative Maintenance) stage. This is something the airline industry executes to perfection.
Remember, while disruptions undeniably provide a wealth of information that can be used to ensure optimum preparation for the next incident, the aim is still to prevent these disruptions from happening in the first place.
In today’s unprecedented environmental, economic and regulatory climate, the old way of doing things is failing to provide a safe prediction for tomorrow. As a result, we simply can’t sit still and carry on as we always have. To do this is to be left behind.
What we need to do is to return to being pragmatists, committed to an ongoing improvement process that is underpinned by the data gathered following every flood, power surge or unexpected political event.
This is what Eternal Improvement thinking is all about, and in today’s climate, it is the only way to stay ahead of the game.
This post originally appeared as a LinkedIn Pulse post.