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The future of resiliency is not resiliency

Zona Walton [ADP - Global Business Resiliency] and I spoke at a private conference last month. The title of our session was The Future of Resiliency. We explored the idea that the future of resiliency isn’t resiliency; that is, it will be something else.

Lootok future of resiliency
The future of resiliency is not resiliency.

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Risky business: the risk matrix

Risky business: the risk matrix

In my previous two posts, I explored better ways of capturing your key assets, threats, and vulnerabilities. Now, we will take these ingredients and plot them on a risk matrix.

First, download Lootok’s risk matrix.

The risk martrix
The risk matrix

The risk matrix provides a way to think about the probability and consequences of risks. Typically, risk is measured using two variables: impact and probability, which make up the axes of matrix.

Both of these variables should be specifically defined before using the risk matrix to plot your risks. The first variable, impact, is a measure of how harmed or disrupted your business would be if the risk occurred. Impacts can occur across different areas, such as finance, regulation, or reputation. Within each impact area, a risk can cause a low or high impact.

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Risky business: Attackers and Defenders™

Risky business: Attackers and Defenders

Welcome back. In my previous post, I presented the first of three activities that Lootok uses to complete risk assessments.

Our second activity, Attackers and Defenders™, identifies threats and vulnerabilities. Remember: threats, vulnerabilities, and assets are the ingredients for a risk. Without these three ingredients, there is no risk. In this post, I will show you how to use this activity to identify your specific threats and vulnerabilities.

At Lootok we love Attackers and Defenders™ because it engages everyone in the room. It is competitive. It involves role-playing. It forces you to think creatively about your business, and most importantly it is fun, which is not a word often used in the same sentence as risk assessments and business continuity!

The Attackers and Defenders™ activity creates an environment for structured dialogue around your organization’s threats and vulnerabilities. The key objective of this activity is to define the threats and vulnerabilities facing your key assets. The activity helps you determine realistic threats to your assets, and the vulnerabilities that allow those threats to cause a disruption. You will also be asked to reach an agreed upon prioritization of your risks, complete with evidence that can be used for reporting, planning, and investment.

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Risky business: Value Map™

Risky business: Value map

In my previous posts about risk, I discussed why we need to consider it, why we have difficulty assessing it, and how to be more objective.

Next, I will explore a number of the activities that Lootok developed to help measure risk at your organization. The first activity is Lootok’s Value Map™. The Value Map™ helps you identify and visualize your organization’s assets. If you recall from the first post, an asset is one of the ingredients of risk.

The Value Map™ is exactly what it sounds like: a giant map on the wall depicting the environment for which you wish to do a risk assessment. The map can be a campus, a country, the globe, an IT map, a factory, or blueprints—whatever environment you wish to measure risk.

Lootok Value Map
Lootok Value Map™

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Risky business: Who cares about risk?

Risky business: Who cares about risk?

Welcome back to my series on risk and risk assessments. In my first post I discussed why it is hard to objectively assess risk, and I suggested ways to look at risk more objectively. If you missed it, check out post 1.

This post explores why we need to think about risk in the first place.

Risk is inherent to doing business, and there are only two strategies that organizations can employ when facing risk:

  1. You can accept your risk
  2. You can reduce or eliminate your risk

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Risky business: What is risk?

Risky business: What is risk?

Risk lurks in all facets of daily life. Luckily, many risks are small: like crossing against the light when there are no cars or trying the new, Ethiopian restaurant down the block. Other risks are high: like quitting your job and doubling down on a new start up. Through our experience working with global organizations, we’ve seen it all. 

In spite of the ubiquity of risks, we rarely analyze them objectively. We are all imperfect, and we rely on past experiences and our emotions to understand the world around us and guide our decision-making. On the one hand, it makes sense that we are wired this way— if we didn’t rely on experience and emotion, we’d have to consciously evaluate every single situation anew, and we’d become paralyzed. On the other hand, there is a downside to the efficiency of this wiring: it makes us awful at objectively estimating risk. For example, bad experiences cloud our ability to accurately measure the impact of risks, as well as their relevance. Other factors, such as media attention, immediacy, control, and choice (Psychologist Paul Slovic) work to further compound that lack of objectivity.

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Lootok presented at Continuity Insights 2016

Last week, Lootok presented with Matt Jarm from Mars Inc. about supply chain resiliency at the New York Continuity Insights Conference.

In our session, we covered the critical aspects of rolling out and maintaining a global supply chain operational risk – business continuity program.  Supply chain leaders are naturally gifted at managing risk, as it is part of their daily lives. But, supply chains are naturally dynamic (i.e., disruptive), which makes many of our traditional operational risk – business continuity techniques ineffective. Supply chain leaders need risk management techniques and tools to help them make decisions, solve problems, and communicate in complex environments.

Learning objectives covered:

  • Common pitfalls (i.e. too fast, too big) of risk and resiliency supply chain rollouts.
  • The necessary methodologies, tools, and roadmaps to be successful in today’s complex, nonlinear, supply-chain environments.

Download full presentation

Supply Chain Resilincy Lootok Continuity Insights 2016
Download full presentation

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Lootok presents at the Enterprise Risk Management Summit

Join me at the Enterprise Risk Management Summit in Las Vegas on November 2, 2016!

I will be speaking with Andrew Miller from ADP about linking reputation management, business continuity and crisis planning to strengthen risk resilience.

Where: Rio All-Suite Hotel & Casino in Las Vegas
When: November 2, 2016, 9:00am
What: Linking reputation management, business continuity and crisis planning to strengthen risk resilience

ERM conference 2016
We look forward to seeing you in Las Vegas!

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Lootok’s 8Rs™ of Resiliency: easy and effective model to communicate, employ, and remember

When working with the masses [end-users; not experts in risk management, business continuity, crisis management], I find it beneficial to present clear, concise, and concrete packaged solutions. People need guidance and structure to help them think through problems and build effective plans. This is one of the reasons Lootok created the 8Rs™ of Resiliency. The goal the 8Rs is to reduce uncertainty, simplify complexity, structure thinking and dialogue, build common ground, and establish preparatory activities. The 8Rs facilitates planning with a plan as the end deliverable (i.e., plans are the byproduct of planning). The 8Rs are designed to provide people with a set of options they can employ to continue operations under various threats and timelines. The 8Rs™ of Resiliency comprises of the following:

  1. Relocate - physical moving assets (e.g., people, technology, equipment) to another location
  2. Reassign – transferring processes (i.e., work) to another location
  3. Repair / Replace – capabilities in place to fix the problem at time of event
  4. Reinforce – fortify, strengthen, assets to tolerate greater impacts and occurrences
  5. Replicate – simultaneous production (i.e., processes, technology, work) at two locations [duplication]; active-active
  6. Redundancy - extra capacity and inventory
  7. Risk Transfer – shift risk to other entities through insurance, contracts, and risk pooling
  8. Relinquish – do nothing [e.g., too cost prohibitive]; risk acceptance strategy
Lootok's 8Rs™
Lootok’s 8Rs™

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Lessons learned from Mayo Clinic - risk management is the organization’s immune system

Since starting Lootok, once a year I go to Rochester, Minnesota, my home State, to take my annual executive physical at the Mayo Clinic. It gives me a good reason to get back to Minnesota to visit family and friends, while maximizing my medical checkups. In just two days, more than fifteen doctors evaluate me. Risk management shares many similarities with the medical field, and it’s where you find the best analogies and metaphors. I wanted to share few of the insights I have gleaned over my time at Mayo.

Risk management is analogous to the immune system. It is not a thing or part. It is a system that co-exists within other systems that must properly function with a larger system called the organization | organism. You cannot just fix the immune system, buy it, or expect miraculous resiliency overnight. The immune system must be earned, strengthened and maintained every day. You need healthy habits, positive attitude and healthy living and work environments, proper planning and long-term vision and dedication, so forth. Risk management works the same way. Risk management also has the same challenges as our immune system: we don’t think much about it until something goes wrong.

Immune system
Immune system

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Debunking myth #3: The risk matrix measures risk

The risk matrix is a standard tool commonly used in risk assessments. It’s straightforward to use, and easy to explain. The only trouble is, the risk matrix doesn’t actually forecast or measure risk.

When used as a quantitative tool, the risk matrix is misunderstood. Our challenge as practitioners is to recognize the limitations of the risk matrix, so we can use it in a way that increases understanding of the threats around us. In this eBook, we explore how.

Download The risk matrix measures risk, the third myth in Lootok’s series on the five myths of business continuity management (BCM)!

The risk matrix measures risk
Myth #3: The risk matrix measures risk

See Myth #1: The plan is the promised land.
See Myth #2: You need a business impact analysis (BIA).
See Myth #4: It gets cheaper and easier.
See Myth #5: Best-in-class BCM software exists.

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The missing factor in your risk assessment: detectability

Dr. Yossi Sheffi explains the “detectability axis,” which considers threats you can only detect only after the fact. This concept challenges our conventional methods of measuring risk using probability and impact.

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