Posts Tagged ‘risk management’


Step 10 of the Business Readiness Process: Ensuring Operational Continuity

The capacity to analyze, decide, and act during and after crises is critical. Here, I focus on the principles and techniques to manage and operate on a 24/7 basis during a crisis. These approaches are directly inspired by military command and control methods.

Operational continuity is part of the contingency planning resulting from risk management. The aim is to continue operating during and after a crisis or emergency, especially ensuring that customer services are maintained as much as possible.

There’s no such thing as a 9 to 5 crisis

If something is going to go wrong, it will probably do so at the worst possible time and the worst possible place. Just like the military, businesses and organizations providing essential services and mission-critical functions must be capable of operating 24 hours a day, 7 days a week.

Time enough for blame

Ensuring operational continuity is about solving the problem, not finding someone to blame. No matter when or where, it’s human nature to want to find someone responsible to lash out or punish them. But does that solve the problem? The focus during a crisis or emergency is on reacting in a timely and effective manner. There will be time enough to determine cause and accountability afterwards.

Caring for your people, caring for yourself

You can’t last long if you’re exhausted, nor can your people. True welfare during a crisis is about making sure your people are well rested and well fed, with proper hygiene, safety, and health care. This also extends to their families if it’s crucial to mission and operational continuity. Military forces know this first hand and take welfare measures very seriously, because it contributes to morale, team work, and resilience.

Operational rhythm and routines

Organizations such as hospitals, fire departments, and police agencies can respond around the clock. But, they also must operate on a continuous basis and be ready to handle surges in demand or action. The model for this is military battle rhythm. This assures leadership, decision-making, and command presence on a continuous basis. This section shows how to follow a military-inspired headquarters rhythm and routine.

Information management and the crisis operations center

The brain of any response must be in the Crisis Operations Center (COC). Information is the equivalent of neural signaling and cognition. The top leader can repair to the COC for briefings and updates, while exercising leadership and influence at the front lines. He knows that no matter what happens, someone is minding the shop to maintain situational awareness and to conduct ongoing planning and control of operations.

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.

© 2016 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.


Step 7: Perform Risk Management and Contingency Plannin

Why analyze and manage risk? 

  • It exists whether we recognize it or not.
  • We are better to identify risks consciously and determine how best to accept and/or manage them.
  • That way, we can decide how much risk we wish to take on and the nature of these risks.
  • We should only take on risks willingly in exchange for potential rewards: risk ≈ reward.

What is risk?

  • Risk is the potential for loss due to uncertainty. All risks are quantifiable as the product of probability of occurrence and potential harmful consequences (R=PxC). There are generic risks, such as natural or manmade disasters, and there are inherent risks, which are specific to each course of action. Both types must be identified, evaluated, and actively managed.
  • There are two focal points of risk management: prevention and mitigation.

Risk Prevention

Prevention seeks to reduce the probability of harmful events before they occur. Accepting risks without concomitant rewards is reckless and irresponsible. Such risks can actually be considered as hazards and should be eliminated through careful planning.

Risk Mitigation

  • The second focus of risk management is mitigation, which comes into play if prevention fails and a harmful event actually occurs. Mitigation entails responding in a timely and effective manner to the event so as to minimize its evolution and impact, taking action to contain its harmful side-effects, and implementing recovery and continuity measures.

Contingency Planning

  • One part of risk mitigation involves contingency planning, so as to deal with harmful events and threats. However, contingency planning can also be used to prepare for exploitation of opportunities arising from chance or the effectiveness of our own plans and actions. In sum, contingency planning is about readiness for both positive and negative outcomes.


Recap of 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.


Monday STAND TO!

By Richard Martin, Expert in Business Readiness and Exploiting Change

“Stand to!” is the order given to put troops in a high state of readiness. It comes from the trenches of the First World War, when forces on both sides would stand ready for action at the parapets just before dawn and just after dusk in case of surprise enemy attack. The practice continues to this day, although adapted to the realities of modern warfare and conflict. The order to “stand to!” encapsulates the whole theory and practice of military readiness, which is about awareness, anticipation, and preparation before, during, and after operations, in war and in peace.

It’s time for a change. My book Brilliant Manoeuvres came out in the fall of 2012 and since then I’ve been issuing Brilliant Manoeuvres just about every Monday morning to help, you, my faithful readers manoeuvre successfully to achieve outstanding growth in your business and leadership capacity.

I’ve decided to change my focus to generating and building your business readiness. This is also in line with my latest writing project, tentatively titled, Stand To! Military Readiness Principles to Thrive in Business and Propel Your Growth.

Why is military readiness relevant for business? In my practice as a business consultant, I’ve noticed that many, if not most, executives and entrepreneurs are well prepared to fight the last war, but not well positioned to fight the current one, much less the next one. They frequently have limited situational awareness, poorly adapted decision-making, planning, and communication processes, and are sluggish in leveraging opportunities, responding to threats, and mitigating risks. After all, change is permanent; the real question is whether a business can exploit it and shape it to its advantage, whether it is positioned to seize and maintain the initiative or to reel from successive blows of evolving markets and competition.

From Awareness to Robustness–What Is Business Readiness?

Business readiness is the capacity to exploit change by maximizing opportunities and minimizing risks and threats in order to grow and thrive.

The first level of business readiness is situational awareness, which I define as the ability to discern an organizational shock or environmental change that may lead to crisis, and to take a measured approach to avoiding, leveraging, or resolving it.

The second level of business readiness is preparedness. A well prepared organization is one which has identified a number of risks and threats beforehand and has taken measures to mitigate or even eliminate some of these through active prevention. Many organizations have contingency plans to deal with various disasters, emergencies, and crises due to technological or natural hazards. The quintessential ready organization is the fire department, which has a well-defined set of threats and risks and is structured, trained, and equipped exactly for that purpose. There are others, however, such as airports, hospitals and other health-care facilities, law enforcement agencies, etc. Firms such as builders, manufacturers and mining companies also must have plans and procedures in place to deal with accidents, technological hazards, competition, and socio-political opposition.

The highest level of business readiness is robustness, which I define as the ability to absorb change and shocks by shaping the environment and leveraging the inevitable risks, threats, and uncertainty. Not many organizations operate at this level of readiness. Military forces come to mind as singularly robust and they can be used in a number of areas beyond combat because of their built in resiliency, flexibility, and access to logistical and human resources anywhere, at any time. While they can provide a useful example of what is possible, the reality is that most organizations are currently not very capable in this regard.

What all of these levels have in common is a certain level of resiliency, the ability to bounce back from adversity and shock and to continue functioning adequately. Further to that, however, situational awarenesspreparedness, and robustness are functions of increasing flexibilityredundancy, risk-taking, resourcefulness, and individual/collective initiative. All of these capabilities can be built into an organization and inculcated into its leadership and employees.

I hope you’ll join me as I develop this theme over the coming weeks and months. Feel free to contact me at any time with suggestions, questions, or comments.

And remember… STAND TO!!!

© 2016 Richard Martin. Reproduction, forwarding, and quotes are permitted with proper attribution.

We seem to live in an era when words are more like bullets—a way to injure and defeat others, to get one’s own way—than a way to communicate in a genuine manner, seeking understanding, insight, and mutual respect.

As I write this, the Paris climate summit is underway. We have just about all the countries in the world represented and we’re told this is the “last chance” to “save the planet.” Last chance. Really? Save the planet? I would think the planet doesn’t need us to “save” it. But, like the gospel inspired song said of That Lucky Old Sun, the earth will surely go on rolling around heaven all day. We may be in danger of disrupting our habitat or of damaging it beyond repair (that remains to be seen), such that we, as a species might be endangered. However, a cursory review of earth’s evolution over geological eons will show that it’s been through much worse before and life has gone on.

The zeal with which enviro-enthusiasts (or should I say fascists?) are claiming that it’s our last chance to keep the planet’s temperature from rising by more than 2 degrees is more religious than scientific. The same can be said of the attempts to claim a scientific consensus, as if scientists all agree with everything that’s claimed about environmentalists.

There may be a scientific consensus about the law of gravity, or evolution through natural selection, because the empirical evidence is overwhelming in favour of those theories. I doubt there is even close to the same level of agreement within the climatological community, which is really the only one that counts scientifically. And yet we keep hearing that 95 % of scientists, or whatever the figure is, believe that global warming is a reality. That may be the case, but being a scientist doesn’t automatically qualify someone to judge the validity of scientific theories outside their field of expertise. Just talk to medical doctors with different specialties to see how divergent the knowledge, skills, and judgment are on any particular illness or condition to realize how important these specialized competencies are to coming to a proper diagnosis and prognosis, much less the best treatment plan.

I’m not necessarily a skeptic about climate change and human-caused warming. However, there has been too much environmental change over the eons on earth to claim any kind of stasis in the matter. After all, what caused the end of the most recent ice age 10 or 12 thousand years ago? Perhaps the woolly mammoths and giant ground sloths were expelling too much methane as they chewed their cud. And what caused the planet to plunge into a deep freeze 130 thousand years ago when the current ice age started?

On the other hand, I am a skeptic when it comes to claims that “the science is settled.” Moreover, I find the current climate (pun intended) against questioning this so called common sense consensus to be a dangerous trend. It’s also very convenient for those with a statist centralizing agenda who wish to restrain economic growth and capitalism, because they claim they are the cause of global warming, at least indirectly. How convenient that there be a such an apocalyptic menace for our collective well-being. Nothing less than total war is needed to combat impending doom. And in war, all manner of propaganda and control mechanisms are warranted to defeat the common enemy. Many of the poorest countries in the world are already clamoring for a transfer of wealth from the wealthy countries to pay for African wind farms and human scale solar power units. After all, nothing should be excluded in order to “save the planet,” because this is our “last best chance.” Once again, I’m not arguing against such a wealth transfer (although there are good arguments against one). But I don’t think that haranguing people into feeling guilty is the correct way to go about it.

The use of language as a weapon and words as bullets is just as pernicious in other areas. Activists—or should I say bullies—at the University of Ottawa have gotten management to discontinue free yoga lessons for handicapped people on the grounds that yoga is “cultural appropriation.” In other words, they claim that you can’t use any idea or activity that comes from another culture if that culture was at one time subjugated by another. Presumably, the reference is to British imperialism in India. Is it okay to have Indian cuisine, or Chinese food? Can we Zumba, or do the limbo? After all, they come from Latin America and the Caribbean, originally all slave societies.

Just to be egalitarian, I don’t think war mongers come off any better. The Islamist inspired attacks in Paris, the Middle East and anywhere else are horrible and the Jihadist threat must be met militarily and politically with appropriate means and strategy. But I don’t think we’re in a “war on terror” any more than we’re engaged in wars on inequality, cultural appropriation, climate change, or global capitalism.

Language and words should help us understand and think better, not separate us into sloganeering tribes with faith-based creeds and intolerant beliefs. After all, words aren’t bullets.

Richard Martin is The Force Multiplier. He brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2015 Richard Martin. Reproduction and quotes are permitted with proper attribution.

  • How vulnerable is your supply chain to disruption and dislocation? Do you have a limited number of suppliers, or multiple ones, with potential alternatives for emergencies?
  • How long could your company or organization withstand disruption and dislocation to your supply chain or other logistical risks?
  • Do you have contingency plans and alternate solutions in place to deal with such conditions?
  • What preventive and mitigation measures do you have in place?
  • How quickly and efficiently can you respond to supply shocks and threats to lines of communication?

I’m never too busy to discuss your needs or those of anyone else you feel may benefit from meeting or talking to me. So feel free to contact me at any time!

Richard Martin is a Master Strategist and Leadership Catalyst. Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2015 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Step 4 in the Battle Readiness procedure we’ve been examining is the estimate and plan.

  • The estimate is a sequential process for assessing the situation and determining key factors, options, and consequences of actions (friendly and enemy). The result of the estimate is a plan.
  • This might seem a bit obvious, but the estimate always starts with a clear understanding and statement of the AIM. You have to know your objective before you can analyze your courses of action and decide on the best one. Omitting the aim is ALWAYS the biggest mistake people make.
  • The key factors to consider in formulating options and plans are:
    • Climate & weather (social, economic, and political environments)
    • Enemy (competitors, big and small, old and new)
    • Terrain (markets)
    • Friendly forces (products and services)
    • Time & space (when, where, how long)
    • Speed & surprise
    • Resources at your disposal (and any gaps)
    • Logistics & support
    • Command, control, communications (who’s in charge, etc.)
  • Generate different courses of action, both for you and for COMPETITORS and other STAKEHOLDERS (whether supportive or hostile). Select the optimal course of action.
  • Your plan should be based on the optimal solution to achieve your aim. Discarded or sub-optimal courses of action (friendly and enemy) may provide input for contingency planning and risk management.

I’m never too busy to discuss your needs or those of anyone else you feel may benefit from meeting or talking to me. So feel free to contact me at any time!

Richard Martin is a Master Strategist and Leadership Catalyst. Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Every once in a while we’re faced with highly emotional reactions to risky situations. The “lone wolf” attacks perpetrated in St-Jean-sur-Richelieu and Ottawa on Canadian state institutions (i.e., soldiers and Parliament) last week fall into this category, as does the Ebola outbreak in western Africa. Yet, if you watch the news and read newspapers, you’d think we’re under attack!

Don’t get me wrong; I’m not saying that the Ebola crisis in Africa isn’t dangerous and a major catastrophe, or that the terrorist threat isn’t real. But we have to keep things in perspective.

So far, a few people have contracted Ebola in North America and Europe. They have all been people who have been in prolonged bodily contact with infected victims in Africa, or who have treated these people. From what I gather, the non-Africans are also all health care workers. A few have survived, although we don’t know yet what, if any long-term consequences there will be on their health.

The US Centers for Disease Control (CDC) deem that a quarantine system is not needed, based on scientific opinion. Meanwhile, some states (e.g. New Jersey) have chosen to impose their own quarantine rules, overriding the considered evaluation of the CDC. The CDC is basing its recommendations on a scientific, rational assessment. I’m not sure the states and various schools that have reacted emotionally are doing the same thing. The science could be wrong, but at least it’s based on rational assessment of the risks and threat, not just emotional reaction. It’s therefore subject to updating as more empirical evidence is gathered and as the theoretical understanding of the disease progresses. Moreover, where does the epidemiological know how reside, in the CDC, or a handful of much smaller and less capable state and municipal agencies?

Whenever we face a potential health crisis, such as a pandemic or epidemic, it’s normal to assess the threats and risks and take preventive or compensatory action. On the other hand, we have to keep the threat in perspective. Every year, thousands of parents refuse to have their children inoculated against common diseases. Whether we’re talking about measles or smallpox, the risks of infection and mortality vary. The common element is that this stupid attitude toward proven measures for preventing and containing these diseases has enabled a periodic resurgence of measles, pertussis (whooping cough), etc. And, we’ve been lucky that smallpox has not come back in strength.

Here’s the thing, though: measles and pertussis can actually kill people, especially the weakest, and that usually means children. So, on the one hand we have an overreaction to Ebola by state and municipal authorities in the US (and no doubt other countries), while some people are too fearful or pigheaded to take active measures such as allowing vaccinations for their children. Not only does this put their own children at risk, but it reduces the overall “herd immunity” of a population. This is required to protect those for whom vaccination doesn’t work no matter what. If you doubt this, I invite you to watch a recent episode of PBS’s Nova science documentary on vaccination panics in the US. You can watch it online.

There is also a lack of perspective on the terrorism threat, and we need a balanced and reasoned approach to the risks of what are known as “lone wolf” terrorists. This isn’t a new threat, or proper to Islamic extremism. There have always been crackpots with various motivations, be they environmentalists ready to spike trees in order to injure forestry workers or Jewish ultra-orthodox extremists willing to blow themselves up in Jerusalem. We also need to keep in mind that terrorism and urban guerrilla are the strategy of the weak. As I wrote in my book, Brilliant Manoeuvres, it “stems from a realization the force one is commanding is incapable of highly coordinated, and highly damaging offensive action.” Security consultancy and analysis firm STRATFOR points out that the “lone wolf” approach to Jihadism is actually mostly a failure for extremist Muslims intending on creating havoc in the West. It comes from a realization that they are unable to launch destructive and coordinated attacks without exposing themselves to extreme risks of mission failure.

When a crisis hits, it’s time to think, even if hastily, not to panic and run around responding to popular appeals to “do something, anything.” We often have to weigh a range of unsavoury options in order to select and implement a “least bad” solution. The danger with overreacting to terrorism is that we impose so many restrictions on civil liberties and access to democratic institutions that the terrorists get a political and social response that is out of all proportion to the actual risks.

When we’re talking about health risks, the danger is that we overreact while we ignore or tolerate much more damning behaviours in our own back yard. Reasonable measures to prevent and mitigate contagion from Africa are one thing. But meanwhile, there are incipient outbreaks of easily preventable and controllable diseases right here, and they don’t come from Africa.

Richard Martin is a Master Strategist and Leadership Catalyst. Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.

This week I’ve decided to provide a diagram which shows the distinct phases and requirements of leadership before, during, and after a crisis hits.

Leadership Action Framework

Richard Martin is The Master Strategist. An expert on strategy and leadership, Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Every year the Institute for Crisis Management in the United States puts out a report on corporate and business crises that made the news in the preceding year. This organization has been tracking such information for over 25 years and it is truly interesting to see how little change there is from year to year in the nature of corporate crises. This knowledge has contributed two of the five “myths” about crises that I’m writing about this month. Here they are:

Myth # 1 – Most crises are caused by factors or the environment outside the company or organization.

Wrong! In fact, it’s the exact opposite. According to ICM, year in and year out, approximately 80% of crises have internal causes. Of these, fully half are caused by management actions and decisions, whereas employees cause the remaining 30% or so. These causes run the gamut from fraud and theft, to poor decision-making, industrial and workplace accidents and hazards, and defective products.

We just have to look at the most recent problems with GM and it’s recall crisis. It turns out that GM cars have been experiencing severe quality and safety problems since about 2000. The reigning corporate culture hindered or prevented the recalls from going forward. Most crises are therefore self-inflicted. Although the vast majority are not necessarily threatening to the public or the organization’s continued existence, this certainly doesn’t help external and internal perceptions. Which leads to the second major myth.

Myth # 2 – Most crises are unpredictable and appear quite suddenly.

Wrong again! And once again it’s almost the exact opposite that is the case. ICM’s data shows that in an average year 60% of all crises are what they refer to as “smouldering.” In other words, the crises don’t just erupt out of nowhere but instead gestate for a certain period of time before crossing a threshold into significance. This means that crises can be predicted and characterized before they become threats. This also means that they can be managed to a certain extent, through various preventive and mitigating measures.

When we combine the data on the causes and development of crises, we can note that almost 50% (80% times 60%) are caused internally and are susceptible to prevention and mitigation before they occur or grow into major problems.

Myth # 3 – Instinct can save my hide.

This is true, but only to a point, and certainly only during the incipient stages of a crisis. Humans and all other animals have an innate ability to react to danger through the fight, flight, or faint responses. If someone comes at you with an axe, there’s a pretty chance you’ll make like a gazelle and high tail it out of there. If you’re backed into a corner, you’ll try to fight your way to safety, like a wolverine. On the other hand, a small minority—and most people once exhaustion and despair set in—will just lie down and play dead, like an opossum.

Whichever way you look at things, though, the only purpose of these reactions is to get you—and your immediate group—out of imminent danger. In no way can instinctive reactions actually solve the underlying cause of the crisis or help you through the decision-making and problem-solving processes needed to get through the crisis. This is why rational thinking and carefully honed and inculcated intuition are the only sure way to weather the storm.

Myth # 4 – It’s about managing our image and PR.

Once again, this may be true, but only as a component of a much larger approach. Unfortunately, when most people think or talk of crisis management, they automatically think of PR and communications. A lot of crisis management firms tout their abilities to help clients communicate with the public, the media and other stakeholders. The real purpose of crisis management, however, is to solve the problem!

Myth # 5 – I can manage through the crisis from behind my desk.

This is probably the most insidious of all the myths, simply because it shows a complete misunderstanding of the nature of crisis and what is needed, to wit, strong leadership. Executives and managers have to lead from the front; they have to see what is happening and be seen. You can’t do this from behind a desk or in a “war room.” Yes, you need to make tough decisions and you have rational decision-making, planning, and problem-solving procedures in place. But you also have to show the world and the people in your team or organization that you know what is happening, why it’s happening, and that you’re trying to regain control of the situation. You have to inspire and motivate your team and those in your care. You have to exercise judgement, evaluate and guard their morale, and manage their welfare.

Richard Martin is The Master Strategist. He is an expert that brings his military and business leadership and management experience to bear for exe-
cutives and organizations seeking to exploit change, maximize opportunity, and minimize risk.
© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.

When a crisis strikes, you can’t just manage in the normal manner, you also have to exercise effective crisis leadership. Too often executives see their role during a crisis as managing the organization’s image and communicating with the public through the media. This is a necessary function, but it is only one small part of crisis leadership and management. Crisis leadership involves the following principles:

  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.
  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.

Richard Martin is a consultant, speaker, and executive coach. He brings his military and business leadership and management experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.