I discovered that my mom is one of the best natural risk managers I know, before I knew that risk management as a discipline existed. I can still hear her voice echoing in my ear: “Don’t do that, you will get hurt” and as an eldest child, I also often heard “don’t do that, your sisters will follow and they will get hurt”. Now that I am much older, I see my mother manifesting in my thought processes and my actions from time to time. I suppose, more often than I would like to admit. Some of her risk management tendencies come to the fore without me consciously thinking about it. I will admit, however, that there are times when her voice is too faint to reach me through layers of noise, created by factors such as stress and other distractors.
Over time, the more I became aware of the significance of risk management, the more I realised how important it is to apply it in our own professional lives too. During the Covid19 pandemic, thousands of people around the globe, who never imagined themselves unemployed, suddenly found themselves without a job and with diminished prospects of finding a new job (as many organisations were laying off and very few hiring). Those who took risk management in their professional lives seriously, would have started to put some money away for a rainy day long before we reached the pandemic. It may not have been enough to sustain their old lifestyles, but may have been enough to ride the worst of the storm. Many others had been living from hand to mouth and therefore had nothing to mitigate against their worst nightmare becoming reality.
If nothing else, the pandemic certainly has highlighted the areas where we have been falling short. One of the most important lessons professionals should take from the crisis is that risk management is not only reserved for organisations with risk management functions in place. It makes absolute sense that individuals should apply the same principles, even if in a more simplistic form, to their own personal and professional lives. Thus creating a risk register for yourself and ensuring that you revisit and regularly update it, is going to become more important in a fast changing world. We must allow ourselves to consider the unthinkable black swans and ask ourselves whether we have controls in place to mitigate against the worst consequences, should those risks materialise. Allow me to mention a few examples that will hopefully help you to start thinking about the kinds of risks you may be exposed to.
- Will your profession still exist in its current form in the foreseeable to long-term future? With the advent of artificial intelligence, it is clear that many professions will be affected. For example, in the legal profession the robots are already here. They use algorithms and machine learning to do work that was previously done by entry-level lawyers and they significantly increase, accuracy, speed and efficiency. Thus with AI continually changing and reshaping the legal profession, lawyers must evolve and acquire new skills to enable them to make use of the technology and remain competitive in the market. What are the measures you need to put in place to ensure that the robots do not make you redundant?
- Could you unexpectedly find yourself being pushed out of the organisation? There has been a significant escalation in the number of executives who, without warning, find themselves under fire in their organisations. This could be for a number of reasons ranging from things like being perceived as a threat by an alpha leader, simply not being accepted in the higher echelons because of the colour of your skin, having unearthed corruption and thus stepping on the toes of the perpetrators, standing in the way of people who are unscrupulous and your presence being inconvenient, someone else having their eye on your job and making false allegations to move you out of the way, new board members wanting to bring ‘their own man’ in, board members betraying you and making you a scapegoat, political interference etc. What measures do you need to put in place to minimise the impact in the event of such a risk materialising?
- How long will your body be able to withstand the constant stressors that you have to deal with? Before we hit the current pandemic, the World Health Organisation had declared stress as the health epidemic of the 21st Chronic stress is the root cause of many physical and mental ailments. Executives tend to suffer from chronic stress as a result of the competitive, complex and fast paced environments they find themselves in. It therefore stands to reason that this would be a material issue for executives, especially during times like the pandemic. Reality is that stress will only escalate as volatility, uncertainty, complexity and ambiguity are constantly increasing.
When our bodies perceive stress, we release the stress hormone cortisol which increases our alertness when we are in danger. When we are continuously in chronic stress mode, our bodies constantly pumps out cortisol. Too much cortisol over an extended period of time has several negative effects on our bodies, including a suppressed immune system, digestive problems, heart disease and weight gain. The longer we remain in such a situation, the more difficult it becomes to reverse out and bring our bodies back to equilibrium. It is therefore not surprising that many executives end up in hospital diagnosed with burnout. What measures do you need to put in place to mitigate against you ending up with a disease that disrupts your life?
Here are a few more bullet points to ponder on, with the objective to serve as a conduit to you opening your eyes to those factors that should be on your personal risk register:
- What if your spouse receives a job offer that will take them to another part of the world?
- What if your spouse loses their job and you become the sole breadwinner?
- What if you are confronted with a divorce?
- What if you are not the right match for the new phase the organisation is entering/new owners’ expectations?
- What if you are pushed to make the decision to become a whistle blower? That moment when you need to display ethical courage.
- What if you find out too late that you have pledged your allegiance to the wrong crowd?
- What if you find yourself in the middle of a reputational crisis, e.g. you are named in a scandal in the media?
- What if you find yourself being pulled into a disciplinary hearing with false accusations?
- What if you find yourself pushed into early retirement? Do you have enough to sustain you long-term?
The fact that none of those risks have materialised yet, does not mean that none of them will ever be waiting for you at the next corner.
The Covid19 pandemic has highlighted how easily we could find ourselves caught unaware. The more we think about our potential risks, the better prepared we would be if those risks were to materialise. I encourage you to put pen to paper, or finger to keyboard, and start listing those risks that have the potential to become reality in your life and think about what it is that you need to put in place to give you a soft landing on your feet.
Start with thinking about the major areas of your life. Then think about what could potentially go wrong in each one of those areas. Don’t shy away from exploring the unthinkable. Sometimes we get caught because we believed that certain things only happen to other people, not to us. Think about what mitigating factors you already have in place and identify the gaps. Then look at what you need to put in place to cover those gaps. Don’t be daunted by the size of the mitigating factors you need to put in place. Acknowledge them and start somewhere. For example, if you determine that you need to save 3 months’ worth of salary for a rainy day, the total amount may seem impossible to get to, but you need to start somewhere. Little amounts, plus interest, add up over time. You may not need the money now, but you may in five years’ time need enough of a buffer to be able to walk out of a job when you are faced with an ethical dilemma. That is worth making the sacrifices now. Many people find themselves stuck in untenable situations because they have never put effort into getting themselves to a position where they are not beholden to the organisation. Having the option to walk, puts us in a much more powerful position when faced with adversity.
Think of yourself as a corporation. The better you manage yourself, the more effective you become in living your purpose. Risks materialising and immobilising you, detract from your purpose. If you become immobilised or ineffective, you do in the process rob those who should have benefitted from you living your purpose.