Felix Kloman is to risk management what Peter Drucker is to management. A legend. Last week I started posting links to some of his great work on the subject of risk management so it doesn’t get lost in cyberspace. With hockey training camps starting soon, the following, written by Mr. Kloman in March 1997, seem appropriate.
Every organization has unique vulnerabilities and is constantly altering its defenses to meet these rapidly changing risks, a bit like an ice hockey goalie, moving from side to side, moving out to cut down the angle for a shooter, leaping to block high shots and then flopping on the ice to protect his or her (yes, there’s been a female goalie in the National Hockey League) net. Stick, pads, gloves and even the facemask are tools of the trade. Yet vulnerabilities remain. In hockey the extreme corners of the net carry the designations “one” through “four.” They are the most exposed points for scoring. But the most vulnerable point, in the estimation of many coaches, is the Five Hole, the triangular gap between the goalie’s legs and the ice. Arms and the stick move faster than legs and, since the goalie generally takes a spread leg stance for greater balance and quick motion, the Five Hole can give a split-second opening for a scoring shot.
The analogy to risk management is obvious. Competition, Murphy or “The Gods” seek and find that vulnerable point. Risk managers acknowledge that no measure of risk control will completely eliminate the Five Hole: vulnerability is a constant. The key is to reduce that vulnerability to its minimum and then to have a counter-attack capability that can offset the loss and win the encounter. That’s the goal of risk management: prepare prudently for the occasional harmful event and yet take strategic advantage of the larger game for eventual victory.
He shoots! He scores!