Research: Why Companies Keep Getting Blind-Sided by Risk

See on Scoop.itSynergetic Management: Business Innovation & Improvement

Supply chain risk ain’t sexy. And that’s why it never gets the funding it deserves.

 

Synergetic Management‘s insight:

Conclusion: Risk management must be everyone’s responsibility, and senior managers must make “bake into their culture” the need for risk analysis and risk management.

Wow! A great article on how risk can affect operations (via supply chain effects) and why risk management efforts often fail to deliver results.

As identified, most organizations do not provide risk visibility to their front-line staff.

–> How can staff help avoid or mitigate risks (before it is too late)?

–> How can anyone say they want employee engagement while simultaneously denying their staff the ability to engage meaningfully?

Also identified is that organizations often fulfilled short-term priorities (cost-cutting) while overlooking the necessary balance between performance and performance capacity. This led them to be more exposed to risks in reality than their paper processes said they should be. (<– if only ALL managers were forced to see how this is the unintended result…)

Why? Most people know that “the golden-hair hero” all-too-often turns out to be the manager who delivers on the immediate priorities, not one who raises the spectre of “potential problems” that are very serious but also generally unlikely to occur. Odds being what they are, very often our “hero” gets promoted out of role BEFORE something negative happens — then the blame falls on that the former underling who now sits in our hero’s old chair, someone who “should have seen this coming”.

Few would be brave enough to admit that failures caused by simple extensions of past approaches should reflect on them also because they used to be in that position or role and did not stop whatever approaches manifested said risk (or worse, may have started them).

But this is not a simple gamble: my higher career risk for my higher chance at promotions. If risks materialize, output is degraded or stops, so EVERYONE bears the full costs. So this “carry on the old and hope to get promoted before something bad happens” strategy is in reality an unconscionable shift of risk onto others for one’s own personal gain

I saw all of the above when I did some risk analysis consulting in the nuclear power industry.  🙁   I am sure it happens in all industries as well.

Enough said.

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