Andy Torbet ex-British Services Paratrooper, bomb disposal officer (above and under-water), zoologist, diver, climber, skydiver, caver. Not your normal 9-5 office colleague so how was he going to translate the extreme to the everyday?
I’ve spent a third of my career working in regulated industries. These behemoths of industry have one thing in common, as a general rule – they are highly risk averse. Subject to regulation from the UK Government, EU and international laws, Marketing departments are rendered compliant agents. Innovation remains academic and not commercialised because of the perceived risks.
However what we see now is these towers of industries being shaken by disruptors, often from outside their own industry. Take energy, their main competitors are now Apple and Google let alone the long-tail of disruptive smart home start-ups. Banks are being nibbled at by numerous fin-tech start-ups cutting out the middle-men. Can these organisations survive with a risk-averse culture?
What Andy called out is the importance of risk management. This is totally different to risk averse where focus is on avoiding the risk rather than approaching and managing it. Regulation on these industries is essential to avoid monopolies, ensure customer fairness and market competition. At the same time they shouldn’t define these organisations, which are ultimately consumer facing brands.
Perception of risk vs. actual risk and the process of managing risk needs a fresh look and who better than an ex-bomb disposal expert who spends most of his time in the darkest depths of underwater caves, accessible only by breathing out when you go through a small gap!
Simply put risk is managing actual risk not the perception of it:
- Understand the risks
- Mitigate the risks by thorough checking of kit, plans and communication
- Know what to do if a risk occurs in terms of equipment, planning and communication
- Level 1: If they happen in a good scenario
- Level 2: If they happen in a bad scenario
- Level 3: If they happen when fail-safes have failed
An example that Andy gave was failure of an oxygen tank at the furthest point on a dive (a mile from the entrance). Firstly mitigate the problem by checking kit, clear planning and team communication. Secondly know what to do, if the oxygen tank fails not a problem there is a back-up. What happens if the back up is faulty – you have a second set of back-up kit to resort to, loaded with the right amount to get you back that mile. You have 99% confidence in the activity against the risk, that is a good percentage to work on. It can never be 100% otherwise it wouldn’t be called a risk!
So the challenge I’d like to set regulated industries is to start managing actual risk with a 99% confidence level rather than defaulting to avoidance of risk. This way those undiscovered caves can be explored and who knows what they’ll turn up!