“Management’s job is not to prevent risk but to build the capability to recover when failures occur” – says Ed Catmull, president of Pixar. While it is possibly a bit stretched (why not prevent known risks if easy?), this value has a great value in the world of uncertainty we are leaving in.
This brings us to the need to have reserves to cater for unknown- unknowns, the fact that our environment is generally shaped by short events of major crisis, and many topics we have discussed at length in this blog.
This also indicates that it is essential that leaders of an organization are not completely swamped by the day-to-day operations but have spare capacity available to do this important job nobody else in the organization can do (because those generally in charge of Enterprise Risk Management do not have the level of authority to really consider disruptive events).
Senior leadership’s role is to be able to manage disruption in a positive way for their organization, when it happens, and this requires a lot of preparation. Because luck is not luck, it is just good preparation.
