You don’t need to mitigate every risk: Tire edition

There’s a nail in the tire of my wife’s car. Rear driver side. Fat head pushed all the way in. It caught her eye on the weekend by accident while the car sat in the driveway. Tire pressure appears normal.

Is this a risk? Since getting a flat tire could cause her to fail to meet her objectives – driving to work – then yes it is a risk.

Did the risk just happen? Of course not. Everyone of us is at risk of getting a flat tire at all times.

If the risk did not just happen then did impact or likelihood just change? Not really. Only our perception of the likelihood of a flat tire changed or what I call the “Moment of Risk Enlightenment”. The tire may have gotten punctured days, weeks or months ago but since we now know about this nail (identify) we have to assess and treat. This is the responsible thing. Ignore is not a step in the framework.

While some people may believe they have to repair or replace the tire immediately, as risk treatments go, we choose to accept the risk and do nothing. Fortunately, this Chevy Traverse comes equipped with a risk dashboard (literally): a real-time tire pressure monitoring device. We will continue to monitor the pressure until the gauge displays a pressure value which exceeds our risk tolerance at which time we will decide on a suitable treatment.

Don’t forget that enterprise risk management is merely a tool to help you prioritize your risks. One doesn’t have to mitigate everything all the time nor should we be distracted by benign risks that just pop up at the expense of the risks where we are currently focusing our efforts and resources.

AUGUST 2012 UPDATE: So I finally took the car in for maintenance and had the GM guy look at the tire. Despite the appearance of a screw, the tire never lost pressure or anything. Seems it was a shallow screw that never really punctured the rubber completely. It looked like a threat but really was not. Good thing I did not spend any time and money replacing the tire.