It’s a risky world out there

Directors and senior executives will be nervous.  In the wake of the February 22 Christchurch earthquake and the more recent Japanese earthquake and tsunami I would expect many organisations to be taking a long hard look at their risk management strategies.

Risk management (RM) has long been an agenda item for directors who are expected to have an oversight of risk management in their organisation and to satisfy themselves that risk management policies and procedures designed and implemented by executives are consistent with corporate strategies.  Part of this assessment is the risk appetite of the organisation but the events of Christchurch will be changing both risk profiles and appetites making many directors nervous.

The process of developing a RM response is to review all the potential risks and then rate them for probability (likelihood) and impact.  These likelihood and impact scores can be three or five or ten point scales or percentages based on subjective scales.  The scores are then typically multiplied to produce a numerical rating for the overall risk.  This quantification of risk provides a tool which is used to allocate priorities (management attention?) and resources to dealing with the different types of risk.

The problem with this methodology is that applying a mathematical approach to risk is meaningless when the unexpected happens.  From my experience the likelihood of earthquake was rated low throughout the country and the impact was never considered to be as catastrophic as has happened.  How many managers compiling risk profiles have researched the likelihood and impact of tsunamis in New Zealand?  The result has been risk profiles that focus on employee theft, plant breakdown, bad publicity and quality control lapses.

Directors and executives will need to revisit their risk management plans.  An assessment of the adequacy of insurance cover is an obvious starting point, but strategies for dealing with an inability to access business premises, the loss of vital records (and the backups which are typically stored in the same business district) and the personal impact on staff of a major event will all have to be revisited.

Many businesses are finding that suppliers affected by the earthquake are not able to meet their commitments or that the affect of the catastrophe on customers is having a direct impact on production, sales and credit collection.

Having realistic mitigation strategies in place and tested for such circumstances is now an important objective for all Chief Executives and senior managers, and directors will be putting pressure on them to ensure that these strategies (policies and procedures) are realistic, sustainable and effective in light of recent events here in New Zealand and around the world.

Tuis, noise and technology

The song of the tuis has returned to the Napier hill.  No, not the snap of a can being opened or the splashing of liquid into a glass, but the song of our native bird.  This morning the birds were in full voice, filling the peaceful morning with a most enjoyable sound.  As I did my daily constitutional I realised that the noise usually present in our streets was absent.  The birds were having a field day and I could actually hear them.

Of course those who live in big cities won’t be used to peace and quiet like we are here in the provinces but I do enjoy those moments when the world seems to retreat and we can enjoy the sound of, well, less noise than usual.

We do live in a very noisy world.  If it’s not the banging and clattering in cafes (making a pot of tea is positively silent by comparison to coffee) or the “background” music in shops, it’s the noise of traffic reverberating through the suburbs.

When the residents of New York looked out their windows and saw the first horseless carriages I suspect they were probably looking forward to no more clattering of the horses hooves or the pong of their droppings.  Little did they foresee what impact the technology of the automobile would have on our planet.  Quite apart from the greenhouse gases they emit in their operation and the resources consumed in their manufacture and running, vehicles are noisy.  People ride in them, cocooned in an air conditioned environment with the audio system playing their favourite music while outside the rumble, rattle and roar of the engine resonates with the road noise from the tyres.  Anyone in the vicinity cannot but notice the passage of the vehicle.

Is there a lesson there for us –if technology does hold the key to our future is it a better future?  Does the lesson of our noisy world suggest that perhaps not?  Maybe the future will be different but not an improvement/

Ps:  some people will appreciate the irony of me writing about a noisy world given my hobby of playing bagpipes 🙂

Art Deco Napier
D&S Pipe Band on parade at Napier’s Art Deco

That’s me, front left talking to the band.

Less Government In Our Lives?

“I want it both ways”.  That’s what many people in New Zealand seem to want.  We are constantly berated by some about getting Government out of their lives or business.  On the web site of one NZ political party is the comment “New Zealanders know best how to spend their own money, not the government”.  In the NZ Herald on Wed 26 Jan the headline reads “Business leaders support partial privatisation of state assets”.

At the last election New Zealanders voted the National party into power to govern based in part by promises of reducing taxes and that has been implemented but any gain has been offset by the increase in GST.

But as soon as something goes wrong we hear these very same people holding their hands out and expecting Government to come to the party.  While not decrying the enormous tragedy of the Christchurch earthquake, the first reaction of business has been to turn to government and ask for handouts, the very same business that wants lower taxes and less Government.

Excuse me – if you reduce taxes and cut back on government expenditure for the armed forces and you decrease the capacity of Government Departments like DoL or Civil Defense or agencies such as hospitals, how can you then expect them to respond adequately in the event of a disaster?

Government is facing huge bills from recent catastrophes – last year’s Canterbury earthquake, the leaky building situation, the Pike River tragedy, the bail out of financial institutions.  In addition the GFC (Global Financial Crisis) has seen a significant slump in tax revenue as the economy has contracted.  Now everyone expects the Government to step in and provide handouts for businesses that can’t operate in Christchurch and to support people with grants.

A simple example to illustrate the point I am making.  People in suburbs are complaining that after ten days they still haven’t got toilet facilities.  The city’s infrastructure has been severely damaged and a quick fix isn’t possible.  So the sight of thousands of portable chemical toilets being delivered is a relief (excuse the pun) for everyone.  But why aren’t there stock piled supplies of such essential items – toilets, tents, food, water etc at strategic places around the country?  Because we don’t want Government in our lives, we want to rely on private enterprise.  But private enterprise is never going to plan for an emergency.  Its never going to carry excess capacity for contingencies.  It can never supplant the work that Government does and must do as a back stop for our society.

Another example:  there’s been a push by some in Government to cut back the scope of fire fighter’s duties to focus solely on fire fighting.  Fortunately, senior people in the service have fought to keep the broader scope of the fire service and we’ve seen the result in recent days in Christchurch.  Superbly trained and committed fire fighters doing what private enterprise could never do.

“New Zealanders know best how to spend their own money, not the government”; Yeah right.  We can spend it on TVs or cars or lattes and don’t worry about tomorrow, Government will step in and pick up the remains of our lives when things go so terribly wrong.  When will we wake up?

Technology and Food

How will you cope if the supermarkets in your community are unable to open? What will you eat? An interesting question given that the people of Christchurch have been experiencing just that in recent days?

One thing I miss from my childhood is the easy access to fresh food that our family was fortunate to have. I was brought up on a small farm just outside Hastings where my parents grew crops for J Wattie Canneries. Peas, all sorts of beans, asparagus and tomatoes were staple crops along with peaches, sweet corn and potatoes. I enjoyed being able to pick vegetables and eat them fresh, nothing like what you now get in the shops. The tangy white juice from sweet corn eaten on the cob (raw) is never matched by the flavour of processed corn. Eating a tomato off the plant in the paddock is a treat and being able to pick and eat peas off the vine in the paddock is, well, probably what I miss most.

We’ve developed a society where we are so many steps away from our food that when disaster strikes we are not able to fend for ourselves. Vegetables and fruit in our local super markets is grown hundreds of kilometres away even though you can go down the road and see a farm that once grew these things now covered in grape vines. Tins of peaches and tomatoes on the shelves contain fruit grown in China or Spain or Australia, rarely these days in New Zealand and, I suspect, not here in Hawke’s Bay. Tinned apricots, once the hall mark of Central Otago, are now imported from overseas.

This food chain depends on technology in so many ways that when something happens to disrupt that technology chaos ensues and we are left struggling. The transport chain is now so extended that it is, in my view, fragile. I worry about current events in the Middle East and the potential impact they will have on oil supplies because they will translate into another oil shock and the resulting crisis for New Zealand will, in my view, be something we have never experienced before.

My frustration is that I don’t have a simple answer. The world isn’t simple anymore and while the idea of going somewhere remote and getting back to basics sounds appealing, it’s not a practical solution. Te Radar tried it but I can’t see myself coping anywhere nearly as well as he did in that situation.

From time to time I grow some veges in pots but I won’t survive long on what I produce

My Vege Garden

I think I’ll settle for checking the cans of food and bottles of water I’ve got stored in my emergency kit in the garage and continuing to hope that any disaster doesn’t last longer than my tolerance of baked beans and peaches.

Technology and Nature

The sight of boulders crashing onto a building and wreckage in the streets of Christchurch made me think about the human struggle with nature.  Despite all the technology, we (humankind) are powerless in the face of nature’s floods (Queensland), fires (Victoria) and earthquakes (Napier and Christchurch).  The devastation wrought by nature overcomes our reinforced steel and flood schemes and no amount of computers, eco-friendly houses or hybrid cars can stop what nature wants to do to our human constructions.

Despite that, technology does play a part in how we respond and cope.  Already social media are (should that be is?) helping people connect and cell phones are being used by people trapped in the  rubble to let rescuers know of their plight.  I heard an interview with a person managing rescuers on the ground in Christchruch from a control centre in Auckland.  He was able to direct resources from throughout the country to give maximum effect to the rescue effort his organisation was making.

News media are making use of You Tube footage posted very quickly after the event and one FaceBook site I’ve looked at has messages of support along with enquiries seeking information about family.

Of course with technology we run the risk of repetition.  Last night’s TV footage seemed to be a repeat of much footage and while this was helpful to people who might just be turning the TV on later in the evening, it did appear as though they were struggling to get new info.

In the aftermath of the quake everyone has to contend with the need to look after their own well being and that of their family/friends while at the same time having a commitment to their work and/or community.  Many have to lift themselves above their own concerns and contribute to the rescue effort and I take my hat off to all of them doing that, their commitment and hard work is a stirring example to us all of what commuinity is about.

So to all the people of Christchurch my heart felt prayers at this time.  May the basic human characteristic of love and concern for each other win through and may technology help you connect with those you care about.

Technology and Sport

Decisions made by judges (or the voting panel) in the Halberg Awards have created quite a controversy.  While the first objective of this post is not to comment on them but to talk about the use of technology in sport, no doubt I’ll get fired up to make some observations about how silly the awards make us look as a sporting nation.

We’ve seen the introduction of the third umpire in sports such as rugby and league but I note that soccer hasn’t embraced technology as yet.  Cricket is also a code troubled by how to make use of technology.  The problem for cricket of course is that calling the umpires capabilities into question by suggesting that they might not be right is not cricket so to speak.

Things like motor sport use technology for timing events and they use replays of video recordings to make judicial decisions.  Swimming has used technology to time events and uses underwater viewing facilities to observe strokes.  Lots of sports use technology in various ways to aid decision making and enhance fairer results.

But in some things technology cannot be used.  Some spports such as diving or skating can’t be judged by techology, the human factor assesses things like style and execution.  I think of the musical field where the judging of musical performances is a subjective thing.  The pitch and tone, the feeling, the interpreatation of a piece is all in the listener’s ear so technology as such can’t be the judge.

And so it is when it comes to sportsperson of the year.  Who is the best team or coach?  Are the criteria based on how much public interest and how many media columns are generated by a team?  Or should the criteria be the more objective results, the number medals, the number of wins, the number of competitions won?  And does it matter if a team is consistently well ranked; does that then make them ineligible in subsequent years?

A case in point must be Gordon Tietjens, coach of the very successful NZ Sevens Rugby Team.  After guiding them to their fourth consequtive Commonwealth gold medal in 2010 he was named NZ Rugby’s Coach of the Year.  When you look at his track record of bringing the best out of young rugby players and winning world series over many (is it nine?) years how can you go past him for coach of the year?  Yet surprisingly he’s never won that award.

What would happen if someone developed an app that took all the performances of teams and players and ranked them based on things like the event result as it ranks in world standings, quality of opposition, consistency of performance and so on.  Objective data rather than subjective feelings (hype?).  At present technology runs on objective data so it would cut out the emotive feel good that seems to have played a part in the Halberg Awards.  But then we are after all human and perhaps we need events like that one to remind us that we are fallible as humans, we are only as good as our knowledge and education and people skills and connectedness.

Bring on the Rugby World Cup.  If the All Blacks draw all their games their consolation will be in knowing that they stand a good chance of being named NZ Sports Team of the Year.

Blogging

Why? Thats a good question (no the answer is not 42) and one that I will try to answer over the next few weeks, but meantime it’s enough to say that I’m here, in this blogspace, and I’m groping my way round to find out how it all works. I presume many of you have been at this point before me so I’ll explore and see how you’ve coped with blogging.