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Here’s proof supporting my 2010 post about how people do not wear watches anymore because we have clocks on our smartphones. The Huffington Post features a list of 9 Gadgets that Smartphones Made Obsolete.

  • Voice recorders
  • Alarm clocks
  • MP3 players
  • Landline phones
  • Video cameras
  • GPS units
  • Wristwatches
  • Flashlights
  • Point-and-shoot cameras

I just heard a tv commercial for CME Group which was clearly written by someone on Madison Avenue who never read a risk management framework. Creative must of thought: “Let’s say the words ‘risk’ and ‘opportunity’ because it will sound businessy.” This idea was then pitched and someone at CME gave a  slow-clap and approved the campaign. When I heard the ad I had to take off my risk hat and scratch my head.

For those of us familiar with the Duality of Uncertainty (TM), and any ERM framework, we know that risks and opportunities are two sides of the same coin. This is why I found the text to this CME Group commercial confusing:

Each day our planet awakens with signs of opportunity.

But with opportunity comes risk.

And to manage this risk the world turns to CME Group.

We help farmers lock in futures prices, banks manage interest rate changes, and airlines hedge fuel costs. All so they can manage their risks and move forward. It’s simply a matter of following the signs. They all lead here.

CME Group. How the world advances.

Does opportunity cause risk? 

Click here to see the ad:

http://www2.vsapartners.com/3175_cme/150_01/030711/01/

Login: cme

Password: 938346

An article by Jared Wade in Risk Management Magazine references the death of luger Nodar Kumaritashvili and includes an email from VANOC head John Furlong relating to the safety concerns about the luge track raised before the Vancouver Games. Furlong wrote: “…someone could get badly hurt… An athlete gets badly injured or worse, and I think the case could be made we were warned and did nothing. Our legal guys should review at least.”

Furlong had the right approach to manage the related legal risk. But do we do risk management only to mitigate our potential legal risks or the risk related to meeting our strategic objectives? After all, the dangers (risks) associated with the course were identified because they were doing risk management!

It is a slippery slope when, after a Loss, lawyers can do Hindsight Risk Management and question the risk treatments/decisions performed in the past. Ask any consultant and they will tell you that risk management is already hard to sell (e.g, easier to sell the cure than the prevention.) But why the hell would any Board of Directors want to entertain an ERM program and a proactive approach to identifying risks when they could get sued for wrongful death or negligence for making the wrong risk treatment decision in hindsight?

Is there less risk doing risk management or not doing risk management? Would it have been better for VANOC to build the track, fill it with ice and send riders to their death?

Someone suggested that if a lawyer had sent Furlong the email about the luge risk, then the email would have be considered privileged and could not be used as evidence against VANOC. (Legal risk management?)

Is that what ERM will become? Will a risk only get documented if it doesn’t create downstream legal risk? Will all risk-related information have to travel through our external legal counsel so the information cannot be used against us? Do we want lawyers sanitizing the list of risks that management knows about to enable blissful ignorance and no lawsuits?

Scary.

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For more of my Vancouver Olympics risk management posts have a look at a these:
You cannot mitigate your risks in hindsight
Timing and severity of risk treatments

I was just reading one of my blog posts about ERM at Hydro One where I wrote that there were very few great case studies about ERM. Until today.

I think this case study about ERM during the organizing of the Vancouver Winter Olympics in the RIMS Risk Management magazine is a close second to the Hydro One case study and a must read. This tale reminds us that we must always to come back to the objectives. This is basic stuff but when you keep reminding yourself of the objectives and the risks that prevent you from acheiving the objectives, it really allows you to focus and develop succinct risk definitions and action plans as opposed to a list of 1000 risks.