5.4 An Antifragile Approach to Managing Risks, the Pandemic, and Other Catastrophes
I have worked with ERM frameworks, implementations, evaluations, and maintenance programs for over 20 years and observed the value it brought to each of my clients. However, I have also observed that some boards and executive teams often were left with a lingering question “Is this enough?”
Over the last three years, in the midst of all the challenges thrust upon Canadian businesses, I have also observed clients that did not have an ERM program and fared very well, even finding a competitive advantage.
These two observations made me wonder why certain organizations succeed and thrive in the absence of a systematic ERM program and why some organizations have an uneasy feeling when they have a very robust ERM program.
An answer to that question struck me as I re-read Nassim Taleb’s book Antifragile – Things That Gain From Disorder. A key premise of this book is that it is impossible to know how to accurately determine the likelihood of an adverse event; instead, organizations should be prepared to handle it whenever it occurs. Clearly, the organizations that thrived had innate antifragile or robust properties.
Based on the principles espoused in this book, and extensive research on business failures, I developed an Organizational Antifragile Assessment tool to assist businesses in understanding where fragilities exist in their organization and how to manage them.
This session “An Antifragile Approach to Managing Risks, the Pandemic, and Other Catastrophes” ties with the topic “Soundbite Sessions (Hot Topics)” in that this is a fresh perspective and way of evaluating and understanding organizational risk and vulnerability. Leaders understand the results of their risk assessment and their related mitigation strategies. However, what they really want an answer to is “are we able to withstand the worst the world can throw at us, how robust are we?”
This session challenges organizations to understand their fragilities and to explore options that take advantage of adverse, random risk events when they occur.
This thinking is trickling into the consciousness of businesses. On October 27, 2021, the Institute of Corporate Directors presented a session titled “Rethinking Risk Management Towards Resiliency and the Role of Insurance.” There is a growing desire to augment organizational management of risk and fragility and this session would address this desire.
Sunesis’ mission is to “empower businesses that empower the economy”. We believe businesses are more empowered when they are antifragile.