Posts Tagged ‘risk management’

Copyright: Borislav Marinic | 123RF Stock Photo

By Richard Martin

The ongoing saga in Catalonia is an excellent illustration of how crucial it is to consider a range of scenarios before implementing a decision that could be heavy with consequences. And the scenarios shouldn’t all be rosy and positive for us. Consideration must be given to the worst-case possibility as well, so we know what we may be up against before acting. This entails a detailed consideration of competiting and opposing positions, as well as those of other stakeholders and bystanders. It also means preparing contingency plans for the most probable and dangerous possibilities so we aren’t caught flatfooted if they come to fruition.

A well-known radio commentator (and former politician) here in Montreal said this week that he had the impression that the Catalonian prime minister and regional authorities hadn’t really thought through the potential consequences of the independance referendum held a few weeks ago. I agree with him; both sides appear guilty of amateurish improvisation. It seems as though both the instigators of Catalonian independance and their opponents inside and outside Catalonia have given little or no thought to the inherent risks in their decisions and actions, as well as the range of possible responses of the Spanish government, population, businesses, and other countries. I also little or no evidence of forethought in securing international recognition for the referendum and subsequent moves. It’s as if it was all being driven by pure emotion, with not a lot of rational consideration of options.

Such conflicts usually build and fester over time until they reach a feverous level. And it takes two to tango. Threat generates counterthreat; action entails counteraction. Not all outcomes can be foreseen ahead of time, but a great many can be characterized to some extent and compared to see which are most probable and consequential. This is the essence of risk management.

Whether we’re talking about a political entity, a business, a non-profit organization or an individual person, prudent forethought should be given to the range of scenarios and options available or possible before deciding and acting. No forecasting or planning process is perfect, but the benefits of a disciplined and rigorous assessment of the situation and its various branches and outcomes will always pay dividends in better decision-making, management, and leadership. And this includes looking at the situation from your opponent’s or competitor’s standpoint. If I were to take this action, what would my opponent do?

It’s how we try to play sports and games, and it’s the essence of strategy, military, diplomatic, political, and commercial.

Copyright 2017 Alcera Consulting Inc.

By Richard Martin

© Alexskopje | 123RF Stock Photo

The recent spate of natural disasters (hurricanes, earthquakes) have shown once again the need for readiness and resiliency for operational and business continuity. I’ve also been working with a client organization to review and upgrade its continuity programme. Here are some basic principles to keep in mind.

  • Readiness for business continuity is a leadership responsibility. It is a strategic concern and must be led by senior leadership and executed by the entire organization and its “chain of command.”
  • Business continuity is part of contingency planning and preparedness to respond and recover after prevention has failed. In other words, it’s part of your risk/threat mitigation strategy.
  • Insurance is needed to help recover and rebuild after a disaster or a crisis, but it can neither prevent nor mitigate the impacts as they unfold. That is where the entire preparedness and readiness programme come into play.
  • There are three phases to business continuity planning and management: preparation, response, and recovery. The preparation phase should always be in effect, and not just an afterthought.
  • Business continuity planning (BCP) must be conducted on a cyclical basis, for instance every year. It must be aligned with other normal management processes such as annual budgeting and capital planning so any required investments can be identified and adequately resourced.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

by Richard Martin

© Kheng Guan Toh

I’ve been answering questions lately (from my daughters, among others) about the threat of war, specifically nuclear war. This obviously comes from the worries about North Korea’s nuclear capabilities and intentions, as well as American ones.

Although this concerns military strategy and geopolitics, the underlying analytical approach can be applied to any consideration of threats, whether a generic SWOT analysis, or the evaluation of a specific security or competitive menace.

Threat analysis goes beyond risk analysis. Risk is the product of the probability and impact of a negative event or cause. Risks are usually categorized under three headings: natural, technological, and human. Focusing on the last, there are criminality, security, labour conflict and many other sub-categories of human originated risks. The problem, however, comes in evaluating the likelihood of a human risk. If we are considering only generic risks, we can talk about probability and impact in abstract terms. For instance, what is the probability of a criminal act? We can use statistics about, say, white collar crime in corporate settings as a starting point for assessing the risk. There are statistics describing the probability of certain acts in certain situations along with average impacts (including their statistical distribution).

But how can we assess a specific threat where there is no historical or statistical data to illuminate the analysis? That’s where military-style threat analysis can be very useful. Military threats are broken into two parts: capability and intent. Capability is self-explanatory: What can the potential or actual enemy do? What are the quantitative and qualitative characteristics of his forces? How many tanks can he deploy? How many aircraft? In the case of North Korea, how many nuclear bombs, of what type, and through what means can they be delivered? I discussed this at length in early September with Dr. Sean Maloney of RMC, an expert on nuclear history and strategy.

While there is uncertainty in capability assessment, at least we’re dealing with tangible realities. Intent is a completely different ballgame. How do we know what the enemy will do? How will he react to our own threats or efforts at conflict resolution? These are imponderables and we must consider a range of scenarios to determine the inevitable commonalities that arise in each, so we can prepare for them. We must also examine the action-reaction cycles that occur because of the moves and countermoves by both sides.

An analogous approach can be used in analyzing and assessing business threats, even though the stakes are obviously of a completely different order and importance. Whether you’re trying to assess your competitors’ next moves, or your market’s reception of your new product, you can learn a lot by considering the threat as both capability and intent. This allows you to disentangle what is possible (given assessed capabilities) from what is probable (given assessed intentions) over a range of scenarios. The insight gained can then be incorporated into your own strategy and contingency planning.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

by Richard Martin

Copyright: Tomas Griger

After the magnitude 8.3 earthquake in Mexico last week, an acquaintance of mine was fretting about how these natural disasters couldn’t be a simple coincidence.

Of course, that acquaintance was referring to the apparently large number of violent systems in the South Atlantic this hurricane season in combination with an earthquake. I’m not sure what these phenomena have to do with each other. How are weather and geology supposed to be connected? Perhaps in the very long term, on the scale of eons. But over days or hours? Not likely.

Humans have a propensity to see causality and correlations where there is just coincidence. Most things happen for no reason at all. It’s easy to see patterns where there are none, especially in nature. If you see linkages where there are none, you can drive yourself crazy with anxiety and paranoia. Things happen. Sometimes they bunch up in time and place. Other times they are more or less spread out.

The trick to being prepared isn’t so much to predict specific causes or events, it’s to prepare for generic outcomes and effects. If you’re in a hurricane or seismic zone, you can’t predict when or where events will occur, but you know that they will occur with a certain frequency and power. For instance, every decade or two, there is a major hurricane in your zone. Every year there is at least a major tropical storm. Geological risks are much harder to characterize, but if you are in high-risk seismic region, then you have to prepare for the worst case.

Of course, preparedness and resiliency are largely a function of wealth. Storms, earthquakes and other natural events are a lot costlier in wealthy regions, but relatively less destructive of life and limb. In poor regions, the relationship is inverted; there are many more deaths and the destruction, although extensive, costs much less. However, the time to rebuild and recover are a direct function of wealth. The greater the capital resources, the faster and easier it is to absorb the costs of reconstruction and resiliency.

These factors also play into the perceptions of coincidence, causality and correlation. We must keep things in perspective when assessing probabilities and impacts. Human destruction is greater in poor countries and increases toward the past. Material destruction was less in the past and is continually increasing. This isn’t because of some connection between events. Rather, it comes from the increased investments in infrastructure, housing, and transportation networks. What was the damage along the Gulf Coast or in Florida prior to people building houses right on the water?

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

By Richard Martin

The current flooding in southern and western Quebec, as well as eastern Ontario and NB is bringing out once again the critical importance of CRISIS LEADERSHIP. That’s right, not just crisis management and crisis communications, but crisis leadership.

Leadership Principles During Crisis

  1. Take charge of the situation.
  2. Recognize what is happening.
  3. Confirm information before reacting.
  4. Maintain situational awareness.
  5. Lead from the front while leverage individual and collective initiative and motivation.
  6. Implement contingency plans and procedures immediately while initiating deliberate decision-making about the next steps.
  7. Continue planning ahead.
  8. Act, assess, and adjust.
  9. Care for yourself and for your subordinates.
  10. Maintain morale and cohesion within your team or organization.

Techniques for Ensuring Welfare of Others and Yourself

  1. Be visible and present.
  2. Communicate and inquire.
  3. Provide creature comforts at least to survive.
  4. Force rest and recuperation.
  5. Establish routines and schedules.
  6. Establish clear chain of command.
  7. Watch for exhaustion, anxiety, distress.

Signs That Morale Is Good

  1. Optimism
  2. Realism
  3. Cooperation and mutual aid
  4. Hard work and sacrifices
  5. Constructive criticism
  6. Confidence in self and leaders

New Testimonial

“Richard has been instrumental in getting me to draw on my hard-won experience and ideas to turn them into marketable intellectual property and products. His disciplined, systematic approach has already led to several significant accomplishments for me. Whether you’re just starting out as an entrepreneur, or working to get to the next level, Richard can boost your productivity and organizational effectiveness. Be forewarned, though. There is no magic formula, just systematic thinking, disciplined execution, and… Richard Martin.”

Caroline Salette, Owner and President, RE/MAX Royal Jordan Inc. and Salette Group Inc.

Richard Martin’s Business Readiness Process:

  1. Ensure vigilance through situational awareness.
  2. Do preliminary assessment of tasks and time.
  3. Activate organization or team.
  4. Conduct reconnaissance.
  5. Do detailed situational estimate.
  6. Conduct wargame and decide on optimal course(s) of action.
  7. Perform risk management and contingency planning.
  8. Communicate plan and issue direction.
  9. Build organizational robustness.
  10. Ensure operational continuity.
  11. Lead and control execution.
  12. Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

by Richard Martin

I’m currently updating a course on crisis and emergency leadership for a government client. It’s a great opportunity to revisit the responsibilities of leaders BEFORE a crisis strikes.

Research shows that most crises have internal causes (see the United Airlines incident, and now the one that has just occurred on an American Airlines flight); they are therefore predictable and can be prevented and mitigated through proper vigilancepreparation, and robustness.

Here are 10 techniques and principles you can apply as an organizational leader to prevent or better prepare for a crisis, before one strikes.

  1. Mobilize your team by anticipating and identifying potential crises before they strike.
  2. Implement rational risk management and prevention/mitigation measures.
  3. Establish priorities for prevention and preparation on an ongoing basis.
  4. Create robust contingency plans to deal with the most likely and most dangerous situations you can envisage.
  5. Implement sound policies and procedures for the most likely crisis situations and events.
  6. Prepare yourself and your team through diligent practice and training.
  7. Employ trusted advisors and associates and ensure they are well qualified and working as a team.
  8. Build as flexible and resilient an organization as possible within the constraints of time and resources.
  9. Work on becoming more self-aware as a leader and seek to acquire the competencies to lead in a crisis.
  10. Develop the support structures and welfare systems you will need to maintain morale, unity and cohesion if a crisis should occur.

And with that, go forth and lead!

New Testimonial

“Richard has been instrumental in drawing on my hard-won experience and ideas to turn them into marketable intellectual property and products. His disciplined, systematic approach has already led to several significant accomplishments for me. Whether you’re just starting out as an entrepreneur, or working to get the next level, Richard can boost your productivity and organizational effectiveness. Be forewarned, though. There is no magic formula, just systematic thinking, disciplined execution, and… Richard Martin.”

Caroline Salette, Owner and President, RE/MAX Royal Jordan Inc. and Salette Group Inc.

Richard Martin’s Business Readiness Process:

  1. Ensure vigilance through situational awareness.
  2. Do preliminary assessment of tasks and time.
  3. Activate organization or team.
  4. Conduct reconnaissance.
  5. Do detailed situational estimate.
  6. Conduct wargame and decide on optimal course(s) of action.
  7. Perform risk management and contingency planning.
  8. Communicate plan and issue direction.
  9. Build organizational robustness.
  10. Ensure operational continuity.
  11. Lead and control execution.
  12. Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

By Richard Martin
This week I want to elaborate more on the concept of Readiness Phases and Readiness States, as these provide the essential framework for forecasting, activation, and response of emergency and business continuity services (of both public and private sectors), as well as contingency plans, and other measures. These can be extended to competitive and other strategic situations, but for now, I want to focus on threats/risks to life, limb, and materiel. This knowledge is sufficiently important that it should be disseminated as widely as possible, so please feel free to do so.
Emergency and Business Continuity planning and operations are managed in three phases:

1. Phase 1 – Preparedness. The focus of this phase is the coordination of plans and procedures. This phase is activated on a continuous basis. Emergency measures and business continuity plans are developed and regularly reviewed through the incorporation of lessons learned from plan activation, training exercises, and learning from similar experiences in other organizations and regions. Physical preparedness of alternate sites, emergency power, emergency supplies, etc. are regularly verified. Operationally critical employees are identified, briefed and trained to respond to a disruptive event. There are three readiness levels, defined as:

  • Normal Readiness: Routine governance and activities are in effect. Emergency Operations Centres (EOC) remain unstaffed but ready for activation. Emergency Management Teams (EMT) meet as required to coordinate and conduct planning and readiness activities. Emergency and Business Continuity planning and readiness measures follow regular planning cycles (for example annual business planning and budgeting processes).
  • Medium Readiness: Medium readiness can be activated at any level of an organization by appropriate, pre-designated authorities based on pre-set criteria such as survival, public service, safety, public health, public order or organizational triggers, directives or advisories. EOCs are activated to a 12/7 posture supplemented with on call personnel outside of these hours. EMTs are activated and meet on declaration of Medium Readiness and at least once a week thereafter. Key tasks of EMTs include coordinating internal communications and preparing or updating plans and directives for future response and recovery options. Heightened security measures may also be in effect if required.
  • High Readiness: High Readiness declaration and triggers are as for Medium Readiness. A local or regional emergency demanding an immediate or delayed response can also lead to a declaration of High Readiness by the designated authority for that location or region. EOCs are augmented to full 24/7 staffing and provide daily (or more frequent) Situation Reports and daily or twice daily situational awareness briefings to the designated authorities. EMTs meet daily (or more frequently, as needed) in their respective EOCs. Heightened security measures may also be in effect.

2. Phase 2 – Response. The focus of this phase is the safety and security of people. This phase is activated by appropriate authorities at relevant organizational levels upon declaration of an emergency involving the occurrence or warning of an imminent disruptive event. Designated emergency/business continuity authorities and EMTs establish and maintain situational awareness while at the same time activating immediate safety and security measures to protect all personnel, assets, and/or individuals or populations under their care or responsibility. Essential elements of information are communicated to staff, the public, stakeholders, contractors, vendors, etc. Designated authorities ensure the conduct of damage assessments (physical, operational, personnel, or cost) of the facilities, systems, networks and assets and this is communicated to all members of the EMT, higher authorities, critical services managers, and critical support function managers. Designated authorities also direct the preparation or heightened readiness of recovery teams and measures. The emergency operational cycle is activated to ensure: daily meetings of the EMT; collation, assessment and dissemination of situational awareness products and damage assessments to decision-makers; planning of recovery measures; and external and internal communications.

3. Phase 3 – Recovery. The focus of phase 3 is the coordination of Critical Support Functions to support continued delivery of Critical Services. Once immediate measures affecting the safety of employees and/or the public are implemented, designated authorities, in consultation with critical services and critical support function managers, activate applicable recovery plans for critical services and associated assets. These recovery options are activated in priority, based on Maximum Allowable Down Time. These options could include: relocation to alternate facilities or hardening of existing critical assets, prioritized system restoration, temporary reallocation of staff, activation of emergency contracted services, etc. Designated authorities then coordinate restoration or reconstruction (if necessary) of facilities, restoration and testing of infrastructure, and resumption of normal functions. At the end of this phase, the disruptive event has been eliminated, allowing designated authorities to terminate response and recovery operations and notify employees, the public, and stakeholders of the return to a normal state. Designated authorities must also coordinate the production of a “Lessons Learned” report.

Richard Martin’s Business Readiness Process:
  1. Ensure vigilance through situational awareness.
  2. Do preliminary assessment of tasks and time.
  3. Activate organization or team.
  4. Conduct reconnaissance.
  5. Do detailed situational estimate.
  6. Conduct wargame and decide on optimal course(s) of action.
  7. Perform risk management and contingency planning.
  8. Communicate plan and issue direction.
  9. Build organizational robustness.
  10. Ensure operational continuity.
  11. Lead and control execution.
  12. Assess performance.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?
Why Sunday and What Does “Stand To” Mean?
Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!
And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.


My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.


© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.