Risk Management: how to think the unthinkable

Putting the brakes on steaks
Meat consumption in the UK has dropped by 17% over the last decade – that's about 350,000 fewer beef cattle being slaughtered each year. Rising awareness of the environmental impact of meat, better quality and availability of meat-free alternatives and animal welfare concerns are all driving a meat-free conversion rate that doubled in 2020 vs. 2019. An industry that’s been around for hundreds of years could be half the size within a couple of decades. Farmers are now scrambling to diversify, with non-farming turnover leaping from 11% to 16% last year. Whether it’s converting farm buildings into holiday accommodation or into manufacturing facilities to turn wool into bedding, it’s an industry that is having to develop the curiosity, courage and velocity to do something completely different.

Keep your opportunities close and your threats closer
Could and should the industry have seen this coming sooner? That’s the million dollar question that drives every Risk Management plan – a staple part of any strategic diet that’s designed to identify, assess and control threats. But to do it well requires a bit more than just multiplying ‘likelihood’ by ‘consequence’ on a spreadsheet. To identify risk you need the ability to imagine a future that doesn’t yet exist. You need to be able to think beyond the status quo, to a world disrupted by change. The problem is, most people find it hard enough to embrace the idea of negative change, but harder still when it’s negative change that might never happen.

In other words, you need a high degree of ‘Adaptability Intelligence’ to create and execute a risk management strategy.

But, whilst most well-run organisations engage in risk management planning, only the most forward-thinking are proactively working on developing their adaptability. Maybe that’s one reason that risk plans are so often just tick-box exercises that fail to imagine the scale of disruption that could happen. That certainly looks to have been the case for the collective thinking that built Europe’s reliance on Russia for oil. Compare that to the owners of National Geographic who foresaw the trajectory of the print industry and so re-invented itself as a TV channel that now reaches over 700m people a month.

Become adaptable to respond rather than react to risks
Ironically, risk is generally perceived as tangible/quantifiable and adaptability isn’t, but whilst risks are uncertain, the need to be adaptable is a cast-iron guarantee. With the likes of Brexit, Covid and the Ukraine war, how many more wake-up calls do organisations need before they start to build the skills required to properly assess their risks in an increasingly complex world?

So here are a couple of questions for you to consider:

1) Do you know what your organisation’s biggest risks really are?

2) Have you considered all the loopy-nut fruitcake outlier left-field scenarios that could sideswipe you, or has your thinking stayed largely on-piste?

Vive la difference
If you haven’t had time to think about the unthinkable, just bear in mind that if the people nicknamed ‘rostbifs’ can give up meat, your organisation might not be as secure as you‘d like to think.

Rich Alderton specialises in Adaptability Intelligence, so to learn how to become more adaptable call us on 07873 823 800, email us or complete our enquiry form.

And you can download Rich's new e-book here.