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Where is your next crisis coming from?
Date of Issue: Wednesday, 21 March, 2018
What do you fear most? How does that compare to the fears of your Shareholders, Board of Directors, or Chief Executive? How well do you understand where your next crisis is likely to come from, and how well does media, attitude, and inter-connected risk help you to prepare?
In January 2018, BSI and BCI published their annual ‘Horizon Scanning Report’ of threats and disruptions. The report, which contained the data of over 600 respondents from over 70 countries, provides a valuable insight into the current fears and realities facing risk professionals.
It matters because it provides a valuable benchmark to consider your risk profile with that of others. Their fears should be your concerns, perhaps even opportunities. The report provides stark warnings about how we interpret data.
Given our reliance on technology, it should be no surprise that the top three perceived threats were IT related (cyber-attacks, data breaches, and unplanned outages). Over the last twelve months there were several global and highly publicised events.
Loss of utilities such as electricity, gas, or water came 4th, whilst in 5th place was adverse weather – reflecting the relationship between the weather and the economy.
Acts of terrorism (6th) and security incidents (7th) highlight the impact of media coverage of terrorist events, but also recognise that traditional security threats remain high on the list of perceived threats.
Fire (8th), supply chain (9th) and transport network disruption (10th) make up the top 10 perceived threats of survey respondents. Health and safety incidents are 12th on the list of perceived threats.
The top 10 disruptors were not so different
IT was at the top (unplanned outages), in second place was adverse weather, and in third place was utilities interruption. Cyber-attacks were in fourth place.
The availability of talent or key skills (5th) was not in the top 10 of perceived threats. Security incidents (6th) combine with skills to highlight the importance of understanding employee risks.
Transport network disruption (7th) was followed by new laws or regulations (8th) – another risk that does not appear on the top 10 list of perceived threats. Fire (9th) and supply chain disruption (10th) were the final two in the top 10 list. Health and safety incidents were 11th on the list of disruption causers.
Top 10 trends
Top of the list is the use of the internet for malicious attacks (1st), the power of social media (3rd), and the high dependence on the internet (5th).
The loss of a key employee (2nd) reflects the importance of employees to organisational survival.
New regulations (4th) and political change (6th) highlight the effect that government policy has on organisations.
The realisation of a global pandemic (7th) threat reflects media coverage of Ebola and Zika, and new strains of influenza as well as terrorist threats of biological warfare.
Increasing supply chain complexity (8th) reflects the global and data driven world in which most businesses operate and, as with many of these trends, appear counter-intuitive as we seek to rely more and more on those things that we rate as significant threats.
Changing consumer attitudes and behaviours (9th) place increasing demands on organisations whilst societies expect employers to treat their employees better. This can create difficult challenges for organisations.
Climate change (10th) reflects experience in transport network disruption, adverse weather, and loss of utilities or services.
What did we learn?
It turns out that our data systems are at greater risk from bugs than from hackers; adverse weather (climate change or not) is a significant threat; employee behaviour is not on our radar as much as it should be; and despite hundreds of years of regulation, we still see new laws as a disruptor. It is too easy to lose sight of traditional risks.
Modern risks monopolise the media – whether that is cyber risks, climate change, or terrorism. All these risks are real, and worthy of consideration, but for all that risks like terrorism are real, the likelihood of them impacting our own business is relatively small.
Many risks are interdependent. The prevalence of the internet helps to provide power to an unregulated social media which in turn drives consumer attitudes and behaviours and has culminated in political change.
Health and safety incidents are just outside the top 10 in terms of both perceived threat and disruption. Concentrating on the top 10 alone carries significant risks.
What can we do about them?
In his book ‘Finding Cassandras to stop catastrophes’, Richard Clarke highlights the importance of identifying, investigating and responding to threats.
Becoming futureproof is about taking the time to understand these risks and to ensure that you and your organisation have plans in place to respond to known risks, are sufficiently agile to respond to unknown risks, and able to capture the opportunities that threats and disruption bring to your marketplace.
Written by John Huckstepp M.Sc., SFIIRSM, CFCIPD, Tech.IOSH, author of the 2018 IIRSM Futureproof Programme and speaker at the IIRSM Conference 2018.
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