News: The Risky Seas
The government’s newly announced immigration policy addresses the policy decision to reduce immigration. It plays to the suggestion of needing to raise skills and raise income for some jobs. Yet, it doesn’t seem to consider the consequences of the change, the thinking seems to be in a silo. Has there been thinking about things like tax receipts, the impact on prices, short term disruptions? Have current staff shortages in the care sector been considered, or ignored? Each is seemingly treated as a separate issue. Is that good governance?
One of the things I always had to do in my role as Head of Business Risk Management at Lloyds TSB was to consider matters of independence and alignment. Some of the risks we faced were aligned, but the alignment was often opaque. Thinking about them as independent was certainly easier when it came to planning mitigations. That though created the risk that we misunderstood the real aggregate risk. The probability of the correlated risk could easily be significantly understated. Like all risk management, if the risk doesn’t happen nothing much else will either other than receiving the invoices for the mitigation.
Looking for risk correlation is sometimes easy, sometimes hard. Every country and every business should put effort into risk management. Almost all would be more profitable, more reliably, in the long run, if they did more.
If you run a business, do spend time thinking about the risky seas in which you sail. Ask what else will happen if the risks happen, (and be honest). A good place to start is to assess the overall risk of a business in the free business audit I offer, Click here.