CERM® Risk Insights

Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Organisational cultures can either enable or inhibit effective risk management through either constructive or defensivebehavioural norms respectively.

When there is constructive organisational culture, people want to, rather than have to, manage risks and do good risk management. And when there is a defensive organisational culture, people avoid doing good risk management and only do risk management when they have to or are being forced, either by management or regulators, merely as a tick-the-box compliance exercise.

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Safety and sustainability are the major considerations within the growing electric vehicle industry, there is lots of excitement and lots of challenges in the fast-moving electric vehicle industry and both descriptions quickly work their way into the conversation.

• Gasoline- and diesel-powered cars are familiar, quick to refuel, and can travel long distances between fill-ups, all of which can’t (yet) necessarily be said about electric cars.
• EVs, however, bring with them a whole unique set of positives, from an inherently exhilarating drive feel to a significantly less harmful impact on the environment.
• The current knocks against EVs will be resolved in time as more people adopt the technology.

The electric car has gone mainstream with sleeker, more affordable options to choose from. Because electric car models are newer than their gas-powered counterparts, many consumers are unaware of their options aside from the many recently announced carmakers’ electric vehicles. In this article, we will focus purely on the pros and cons of all-electric cars.

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All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.
Arthur Schopenhauer – Philosopher

I’ve seen the Future Of Work. And, I don’t like it. Why? In Portland, Oregon, a retail store sells kombucha, a slightly alcoholic green or black tea. Great location. Great storefront. Sure money-maker!

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Guest Post by Matt Feldman (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

I get it, we all love the “easy” button. Whether it’s ordering groceries for delivery today, household items for delivery tomorrow, or a ride to the airport via a tap on your phone, we’ve gotten used to convenience and simplicity when it comes to solving problems.

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Guest Post by Alex Sidorenko (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

In the last 2 years my team was involved in automating risk management part for investment decision making, vendor accreditation, market risk, tender process, treasury management, credit risk and project management. That’s 8 different software packages selected from dozens of possible options. In this article I wanted to share some important takeaways from our risk management automation.

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Guest Post by Bill Pomfret (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

This article will be providing “World Class Maintenance” Best Practices.  As I write this article, I like to ask what people are saying about this topic.

Best Maintenance Repair Practices

Several surveys conducted in industries throughout the world have found that 70% of equipment failures are self-induced. Maintenance personnel who are not following what is termed ‘Best Maintenance Repair Practices’ substantially affect these failures. Between 30% and 50% of the self-induced failures are the result of maintenance personnel not knowing the basics of maintenance.

Maintenance personnel who, although skilled, choose not to follow best maintenance repair practices, potentially cause another 20% to 30% of those failures. The existence of this problem has been further validated through the skills assessment process performed in companies throughout the world. This program evaluated the knowledge of basic maintenance fundamentals through a combination of written, identification and performance assessments of thousands of maintenance personnel from a wide variety of industries.

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Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Orders and being ordered can mean many things to many people.  In biology order concerns the taxonomic rank for classifying organisms.  More generally speaking it concerns the arrangement of people or things in relation to each other in some form of pattern, sequence, or method.  Alternatively, it can mean an authoritative command or instructions that are, typically, conveyed in a particular sequence.  When ordering a meal, for example, it’s normally done in the order in which the food will be served, but that’s always best clarified in some countries!

However, and despite orders regulating many of the things we do and being an intimate part of our lives, the concept of giving or taking ‘orders’ is taken as reprehensible and repugnant behaviour by some.  Ordering for them, outside of restaurants or other purveyors of supplies, smacks of being in the army or being subjugated.  Regimentation and discipline are often frowned upon by some of our more sensitive colleagues.

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Don’t limit yourself. Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you believe, remember, you can achieve. ~Mary Kay Ash – Entrepreneur

Almost 40% of people according to surveys say their work and jobs make little difference to the organization, customer or marketplace. OK! So why do these jobs exist in VUCA time? Great question.

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Guest Post by Bill Pomfret (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

We see the value of enterprise risk management everywhere we look. We see it in the news, we can see it in our customers’ success, We can even see it on the roads in speed limit signs. We know that risk management is deeply enmeshed in both the success and failures of the corporate world and beyond.

However, as you lobby for the support your ERM program needs, you may find yourself battling a more skeptical outlook. When we think about how to justify risk management, we’re often reminded of an old saying: “How many ships have I saved by erecting a lighthouse?” It’s hard to quantify the value of a preventative measure, which is exactly what a risk management program does.

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Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

People conclude what is expected of them is based on cues received from the forces that they face daily. These forces drive what they believe and how they should behave – in either constructive or defensive ways. These behaviours can either enables or inhibits effective risk management.

These forces also influence how people:

1. View, identify, manage, and report risks.
2. How do they use risk management processes to create value, make decisions, and set and achieve objectives.
3. Improve organisational performance.

The attitude towards risks and risk management varies from person to person, from unit to unit, and from stakeholder to stakeholder. It can also be influenced by social context and surrounding culture.

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The system is not working. That is how a paradigm shift begins: the established way of seeing the world no longer functions.
Matthew Fox – American Actor

COVID has created some big business winners. But, post-COVID it’s the end of many companies as we know them:

“The Coronavirus pandemic brought the global economy to a screeching halt this spring (2020), sparking fears of a corporate bloodbath. As the year ends, it’s clear that the crisis has rewired the economy in surprising ways and served up unexpected opportunities for some big businesses to prosper.”

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Guest Post by James Kline (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Recently the International Organization for Standardization (ISO) released the 2021 certification numbers. Oxebridge Quality Resources did a good analysis of the 9001 numbers.  This piece looks at the results from all the certifications and provides comparison in key certifications between China and the United States.

Overview

In October 2021 I discussed the results of the 2020 certifications numbers. (1) Until last year, ISO certification numbers for the dominate certification 9001 were on a downward trend. In 2020 the number of 9001 certifications increased. The increase was due to two primary factors. One was organizations which had not previously reported certifications reported them. The second was the growth in Chinese certifications.

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Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Project documentation; the bane of some people’s lives, for other’s their raison d’être.  Documentation is essential and its written word can ensure effective communication so there is as little misunderstanding as possible.  Requirements will be definitive, obligations and liabilities will be unambiguous, and instructions will be clear.

Projects typically require plans and processes as well as details of products and services and methodologies for contemporaneous purposes.  They contribute to corporate knowledge, assist with learning lessons and may defend any liability.  Documents are usually subject to some form of acceptance, approval, non-objection or similar.

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Is climate change humanity’s greatest ever risk management failure?
The Guardian newspaper

Climate change. Global warming. These are the ‘new normal’ or the ultimate ‘Horsemen of the Apocalypse’. U.S. intelligence report said:

“Global environmental and ecological degradation, as well as climate change, are likely to fuel competition for resources, economic distress, and social discontent through 2019 and beyond. Climate hazards such as extreme weather, higher temperatures, droughts, floods, wildfires, storms, sea level rise, soil degradation, and acidifying oceans are intensifying, threatening infrastructure, health, and water and food security.”

Read more: Climate Change or Global Extinction?

Risk likelihoods as well as direct risk consequences are increasing. Extreme heat is impacting global food supply chains, housing near the ocean, increases in cancer, and other factors.

Are you a denier? According to a recent report, there’s a 95% likelihood that VUCANs are the drivers of climate change through carbon dioxide emission.

OK, is human extinction too strong of a prediction? The New York Times said:

“Humans are transforming Earth’s natural landscapes so dramatically that as many as one million plant and animal species are now at risk of extinction, posing a dire threat to ecosystems that people all over the world depend on for their survival .”

Story: You may be a green believer or even an evangelist. Or, you may be a denier. It really doesn’t matter.

We’re in a global heating environment and changing political environment. So, pay attention to sustainability. I was a green skeptic until I saw first-hand major environmental changes occurring over a few years. I catch & release salmon on the Columbia River in Oregon, USA., which is a beautiful and pristine environment. The problem is over the last 30 years, salmon fishing changed. Fewer fish. Smaller fish. Shorter fishing season. Not good. As an engineer, I thought maybe we were going through a macro weather cycle from cold to warm.

Work Lesson Earned: Climate is now directly tied to work and salaries. More people see climate change impacting job retention, promotional opportunities, and recruitment. A recent survey concluded 74% of executives say climate change poses risks to their job security.  How does climate change impact or may impact your work? Are there any opportunities for you? As traditional industries adapt to the changing environment, have you considered working in a green business? You’re saving humankind. You’re having fun. You’re doing good. You’re saving the planet.

Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Healthy organisations create an environment where organisational members have mutual trust and respect for each other, especially in terms of how they decide and implement decisions. They create an environment in which organisational members are empowered to deal with their problems and where problems can be identified, discussed, and solved with mutual trust and respect through cooperation and communication amongst themselves.

When there is mutual trust and respect, there will be more teamwork and collaboration. This constructive and collaborative culture will generate a positive ‘risk culture’ and a collaborative approach to risk management. It builds a higher level of risk maturity for the organisation.

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