Associations, Polar Bears and Risk: What’s your risk strategy?

Welcome to my blog! Read my musings on associations, nonprofits, risk, strategy, leadership, management, insurance, my dogs and other things of interest. This posting mulls the passive attitude many of us take towards managing risk. Hope you enjoy and come back often.

As a risk management consultant, call me crazy but I think risk assessment and mitigation (aka risk management) should be a part of all business decisions especially strategic ones. However in my experience most associations and nonprofits don’t do a very good job with incorporating risk management into their planning process or daily operations. Oftentimes an event, program, service or activity is deemed “too risky” without the benefit of careful analysis. Even if the activity is risky you may be able to mitigate the risk to make it acceptable. On the flip side an association can take a course of action that really is too risky or a poor fit with its mission.

Why do people and organizations have such a hard time assessing risk? Risk by its nature as the possibility of loss or harm has negative contentions – we don’t want to be wrong, fail or cause harm. But risk taking is necessary to move forward and be successful. Without a structured process to assess and mitigate risks you fall victim to your often flawed perceptions of risk. John Ross in his book The Polar Bear Strategy recounts a tale of being on an Arctic expedition with five other people when they happened upon an area recently visited by a polar bear. The group discussed its options in the event of a polar bear attack but couldn’t decide what precautions to take. “Out CB049628on that tundra, because the six of us couldn’t agree on the severity of the risk of meeting a bear, we neglected to come up with a strategy. Instead, paralyzed, we chose the worst possible course of action: to do nothing at all.”

Before seeing signs of the polar bear, Ross’s group had not discussed its bear plan although encountering a polar bear in the Arctic is not an unusual risk. The group had a rifle (because the bush pilot required them to take one) but kept it stored in a duffel bag and it is unclear if anyone had any expertise shooting a rifle. In retrospect a dumb idea not to be prepared but they all lived to tell the tale and John wrote a book about risk. So how can we avoid making a similar mistake as we run our organizations?

Risk management is a format to identify and analyze risks followed by selecting ways to mitigate the threats. We still tend to abdicate our business and personal risk decisions to fate. We tend to be optimistic people we don’t like to think about the bad things that can happen. Plus the process seems rather tedious and boring. But stopping to determine what could go wrong, evaluate the probability of an event occurring and identifying ways to manage the risk can be interesting exercise. Risk management helps you identify the potential obstacles and create ways to overcome the problems rather having a bad experience that derails or destroys a new initiative. Consider it as a part of your planning process.

All those Boy Scouts can’t be wrong with “Be Prepared.”

So what’s your polar bear strategy?

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  1. #1 by Deirdre Reid on October 16, 2009 - 12:43 pm

    I’m so glad you started blogging! Our industry needs your knowledge. You’re filling a great need. And this first post is excellent. “Be prepared but don’t be scared” will always serve as a good motto for organizations. Welcome to the blogosphere!

    • #2 by Leslie White on October 16, 2009 - 1:31 pm

      Deirdre, Thanks for the nice words. I like the motto Be prepared but don’t be scared – I may use it in my next post.

  2. #3 by Kristen Pike on October 16, 2009 - 1:12 pm

    Hi Leslie,

    Really enjoyed your entry! I really liked your comment about how unstructured risk management can open you to becoming a victim of your flawed perception of risk. That thought would really speak to a lot of people – so much of successful risk management is founded in structure and formalization.

    Looking forward to future entries. What a great start!

    Regards,
    Kristen

    • #4 by Leslie White on October 16, 2009 - 1:32 pm

      Kristen, Thnks for your support. Clearrisk has a lot of useful information and keeps me up on current events.

  3. #5 by Sharon Kneebone on October 16, 2009 - 2:29 pm

    Leslie, this is great and definitely needed. I plan on sending a link to our management team here!

    • #6 by Leslie White on October 16, 2009 - 3:50 pm

      Sharon, Thanks. Hope the management team likes it.

  4. #7 by Shelly Alcorn, CAE on October 16, 2009 - 5:12 pm

    Great first post! I am looking forward to seeing more from you!

    6 people + 1 polar bear/no strategy = dinner.

    Shelly

    • #8 by Leslie White on October 16, 2009 - 7:35 pm

      Shelly – Thanks. I think those guys were very lucky – like most associations. Let’s try not to be someone’s dinner.

  5. #9 by Maddie Grant on October 17, 2009 - 1:44 pm

    Welcome to the blogosphere babe! Now where’s my guest post you owe me? kidding – this is better! 😉

    • #10 by Leslie White on October 19, 2009 - 10:42 am

      Thanks for the welcome. I’m working on the guest post.:-)

  6. #11 by Grace Smith on October 20, 2009 - 9:52 am

    Leslie,

    This looks great and very inspiring! I will pass this along here in New York. You go, Girl.

    • #12 by Leslie White on October 20, 2009 - 10:27 am

      Thanks, glad you liked it and thanks for passing it on.

  7. #13 by Diana Hester on October 20, 2009 - 10:17 am

    Great insight, thank you Leslie

    • #14 by Leslie White on October 20, 2009 - 10:27 am

      Thanks, Diana. Hopefully just the first of many good posts.

  8. #15 by Peggy Hoffman on October 26, 2009 - 10:10 am

    Great way to make this subject clear from the start (and welcome to the blogosphere) … are polar bears endangered? I think some assn execs are. So look forward to hearing on how we can get ourselves off the endangered list.

    • #16 by Leslie White on October 27, 2009 - 8:11 am

      Intersting point about polar bears being on the endangered list. A new twist to the thread.

  9. #17 by Jeff Hurt on October 27, 2009 - 9:38 am

    Welcome to the blogosphere and the nonprofit association world (as well as the corporate world) needs you knowledge.

    Thanks for writing this and the polar bear analogy is perfect. I can’t tell you how many times I’ve set on a board and raised risks of suggested paths. Most of the time I was told “it” could never happen and therefore we didn’t need to come up with a risk strategy. Sometimes I was told I was just being dramatic.

    Regardless, we do need to count the risks and create a risk strategy.

    • #18 by Leslie White on October 27, 2009 - 10:18 am

      Jeff,
      Thanks for the welcome. Getting boards (and people) to think about risks is always an uphill battle. We are all optimists! But bad things happen to even good organizations. We just need to keep plugging away.

  10. #19 by KiKi L'Italien on October 27, 2009 - 3:59 pm

    Leslie, you are amazing. Thanks for starting a blog, my dear!

  11. #21 by Ken Groff on September 9, 2010 - 8:10 pm

    Excellent article. Truer words have not been spoken. Associations and nonprofit organization can really use this insight. I am prepared to read more. Thank you for your thoughts.

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