Resilience strictly speaking – Disaster management: Red Ants, Gray Rhino's, Black Swans, and the relation between BCM, Risk Management (RM) and Crisis Management (CM)

Author: Manu Steens

A first question I ask myself: how do these concepts relate to one another?

The following figure of disasters can offer a solution: this is about known knowns.

This table provides a minimalistic sketch as an answer to the question “What can Disasters be like?

In addition, there are Unknown Knowns such as the Gray Rinho’s.

These are things that come to us, that we know they are there, but that we choose not to see, or forget about them.

Gray Rhino’s are not divisible in well-known or poorly known probability and impact. The impact is great. The probability is great. They are always well-known in terms of probability and impact, and thus fit within the quadrant of Disasters, as follows:

Known Unknowns also exist. These are things we know that are there but we do not know exactlywhat they are. Therefore we can not treat them. These can not be classified with a probability or impact. The consequences may or may not be known. The odds equally. If the consequences are large, but not actively known, and the probability is estimated low, but it suddenly occurs, without any expectation of the event, we speak of a Black Swan. The turkey does not know why the farmer always gives him food, but could have suspected it from a suspicious “Why” question. But the turkey does not know the Christmas party, and can not really assess the probability.

Finally there are Unknown Unknowns. We do not know that we do not know them.

Not only do we not know the probability and the impact, we do not know the event, we do not know the reason, we do not know the consequences. So we can not give a foresight example of this. Unless you look back on the past (Hindsight). Was it right of the priest to save Adolf Hitler from drowning, when he had fallen through the ice as a child?

It is the intention of Resilience management to get to know as many of these four groups as possible and to push them back within the possibilities of the disasters square.

This provides a possible way to frame resilient needs. Where is CM, however? The answer is: everywhere. In all 4 groups, CM actively takes action when a threat manifests itself. Because the known knowns are best known, it is always an advantage to elaborate and prepare RM.

Question 2: what are historically the added values of BCM, RM and CM?

The known added values already known for these three disciplines, are:

  • Compliance with legislation and with clients
  • Protection of the reputation of the organization and the strength of the brand
  • For the time being: competitive advantage
  • Operational improvements
  • Capturing the knowledge and experiences
  • Value protection

Question 3: what are the “new” added values ​​of BCM & RM?

The new added values according to ISO 31000 are:

  • Value creation, and therefore also
  • Included opportunities

Value creation

  • By studying the threats in new and existing projects and processes, these threats can be tackled so that they happen with a greater probability of success and with less costs in the aftercare phase.
  • This also increases the quality of the output and the outcomes, enabling a stronger positioning in the market, which attracts potential customers.
  • This immediately improves the reputation, creating a positive spiral that reflects in a better market value of the organization and generates a positive effect on the stock market.
  • By applying RM in its projects, the government organizations will mutatis mutandis create added value on a social level, which also means more income for the governments and thus create a positive value spiral for society.

Included opportunities

  • When an opportunity presents itself, it can be recorded correctly, in the sense that the risks run by the organization are known and can be tackled in order to optimize its probabilities of success.
  • Because RM has an ‘outlook’, threats, but also opportunities, are better and faster seen.
  • Because there is systematic reporting that is integrated into all layers of the organization and the processes and projects of the business, the policy can assess the opportunities better and faster correctly.

These added values also apply to BCM.

Question 4: what is the most important added value of CM?

What I really want to know is what is expected by the co-workers and by society.

People expect more and more from organizations. They desire certainty in uncertain times. This is what the organization has to do:

  • Deal with the threat
  • Meet the urgency
  • Fight the uncertainty

Deal with the threat

Threats are relative and personal. There are also general threats that affect us all. Perhaps the best example is terror. Although terrorist attacks demand far fewer casualties than fine dust year after year, it affects the people personally through the choice of method, place of occurrence and the timing. They choose these well to maximize fear. This fear touches everyone personally, because there is arbitrariness where when and how one can be a victim. The society does not know, and as a result, everyone of the potential victims address their anger against the perpetrators.

Meet the urgency

Urgency is personal. A potential crisis that affects you personally is usually urgent as long as you are still hoping for opportunities to escape from it.

Fight the uncertainty

The organization mainly does this by making a division into operational management, communication management and strategic management.

With the operational management the organization can show that the problem is being addressed. Counter actions take place and there are claims to be observed. With the strategic management the organization can do sensemaking, and give an understanding to the people of where they stand. The organization can also indicate its actions, explaining the reasons for these actions, to include its liabilities. Also to learn lessons, to avoid the problems in the future. With the communication management, the organization can make itself be heard about the situation, that it is working on the problem, and what the expectations are.

Question 5: And now this: What about Red Ants?

Is this yet another invention to describe risks? No, actually not. It is a disaster type that is naturally present: incidents with small to moderate impact and small to high probability, but with the possibility to grow into a Black Swan or a Gray Rhino very quickly.

Black Swans (Nicolaas Taleb): very small probabilities, very big impacts.
Gray Rhino’s (Michèle Wucker): Very big probabilities, very big impacts
Red Ants: Very big probabilities, smaller impacts.

Often Red Ants are the small incidents without major consequences that are a warning of imperfections in the safety of a system or organization. Usually a large number of red ants precede a gray rhino or a black swan. In addition to the fact that red ants are an annoying phenomenon in the field of security they are a reason to extinguish a lot of fires, and they therefore have a serious warning function. This is: find the root cause and tackle it thoroughly, otherwise sooner or later really big accidents happen.

So every “animal species” is therefore to be taken seriously.

Question 6: And what can you do about it?

Well, let’s present this schematically in the disaster management table:

Conclusion:

  • CM Exercises are the most necessary aspect in disaster management.
  • Risk management includes preventive measures and protective measures (by analogy with the bow-tie analysis method).
  • Uncertainties have the characteristic that probabilities are poorly known but the impacts are better known. Usually because causes are poorly known. As a result, there is a particular need for protective measures.
  • Ambiguities have the characteristic that impacts are poorly known but the probabilities are better known. Usually because consequences are poorly known. As a result, there is a particular need for preventive measures.
  • In the event of unkown probabilities and impacts, the focus must be on the lookout, to estimate unexpected matters in a timely manner and to incorporate measures in the policy of the organization on a continuous basis.

Urgency Assessment

Author: Manu Steens

(inspired by “Risk Management – Concepts and Guidance” by Carl L. Pritchard)

Purpose of this type of assessment:

Classically risks are evaluated on a risk matrix, with typical colors red, orange, yellow and green, to decreasing values ​​of the risk. The boxes in that risk matrix that have the value depend on the probability and the impact of the risk event. Within one such box can put more than one risk. These can then all be handled and impacted in the risk register. Yet there are still reasons to take one risk, such as a shortage of personnel, before another. The question then is in which order these will be prioritized. An urgency assessment is required for this.

Construction of a template:

Since an urgency assessment is assigned to an organization, two sets of inputs are required:

– The brainstorm for drawing up the template
– Fit the inputs of the project / process / objectives / strategic risks to the template.

The former need knowledge of the environment of the organization. This is often dependant on the organization. Because of that, a template can often be reasnably uniform within an organization, but this can change over time with the environment variables.

The template is drawn up as a table, with evaluation criteria per row, and score descriptions per column.

The outputs of this assessment is a score one obtains as the sum of the values of the applicable columns, per row. The higher the score, the more urgent the risk must be treated.

Example of a template:

Project name: Risk event:
Urgency Assessment
Evaluation criteria

1

2 3

4

Score
Experience of the project / process / objectives team with this type of risk.
Knowledge of / competence in workarounds and ad hoc solutions for this type. Some experience in dealing with this type of risk among the team members. One or two team members who have experience with this type of risk. No member of the team has experience with this type of risk.
Chance that the risk occurs before the next review. The probability is higher the later in the project and it does not occur for the next review. The probability is just as high later in the project as before the next review. The probability is high prior to the next review. The probability is highest the following two time periods (eg weeks, months).
Customer sensitivity The customer has no expectations regarding this risk and would suggest that we solve it. The customer expects this problem to be resolved immediately without delay. This risk affects multiple modules and quickly occurs in the project. This risk affects multiple modules and the project / process is highly dependent on each of them.
Complexity of / integration in the project / process / objective The risk only affects one module of the project and that module can be handled independently. This risk affects the entire project / process but only occurs at the end of the life cycle of the project / process. This risk affects multiple modules and occurs early in the project / process. This risk affects multiple modules and the project / process is highly dependent on each of them.
Visibility This risk can easily be identified in advance, which allows for a last minute intervention. The risk has a few recognizable features that allow for early identification. This risk is only identifiable when it occurs. This risk is only identified when it has happened.
Total

 

Steps in using this technique:


The first step in building this template is to determine the types of criteria that make one risk more urgent than the other. Criteria that indicate that one or more events are about to arrive.

The second step is to create a scale. For each criterion you determine a numerical scale that indicates the influence on the urgency of the risk, running from a high number for a high urgency to a low number for a low urgency. (In the example there is only a single numerical scale.)

Step three: validate the template. Validation can be performed by testing against a number of well-known cases of high and low urgency. If the template differs from what is known from the history of the cases, the scales must be adjusted.

Step four: evaluate all major risks. These are typically the risks in the red and orange zone of the risk matrix.

Step five: prioritize the risk events. Red risks with a high urgency should be given priority on, for example, orange risks with a lower urgency.

Step six: Arrange the risk register according to the priority and implement the measures.

 

Self-assessment BCM – tools

If you want to know how far you stand with the implementation of your BCM operation, you must carry out a (self-) assessment.

There are specialists for hire to do an audit and write an expensive report. But often you do not have the money in times of crisis. Then you have to do it yourself. You need a tool for that. Here you will find a Dutch simple Excel tool (and an English translation) that you can still adapt to your own needs.

 

BCM – How to determine the criticality of a process in a BIA?

Authors: Joris Bouve and Manu Steens

In BCM there is a lot of talk about time-critical processes (TCP), essential processes (EP) and necessary processes (NP).

Typically one uses as definition:

  • TCP: those processes that have to be restarted within two working days;
  • EP: those processes that do not have to restart within two days, but within two weeks;
  • NP: those processes that do not have to restart within two weeks, but within two months.

How critical a process is, can also be approached in a different way: if the impact of a too long outage (eg > 2 days) of the process becomes too much to handle, then you have to quickly (eg in <2 days ) restart the process.

The question here is: how do you determine the criticality of a process?

Proceed as follows (see table below):

  • List the processes in the [process] column;
  • Determine the impact on your service if the process threatens to fall out in the following columns.
  1. If the impact is of such a nature that the service is seriously compromised in the event of an outage that would last for more than 2 days or if there is a legal provision that requires a restart within a period of 2 days, you describe that impact in the column. in. There is then a time-critical process. In the [process criticality] column, enter TCP.
  2. 2 dagen].”>when outage > 2 days]. You can also state here what measures you will take to minimize the effect or how you can still guarantee the intended service
  3. If the impact is of such a nature that the service is seriously compromised in the event of an outage that would last more than 2 weeks or if there is a legal provision that requires a restart within a period of 2 weeks, you describe that impact in the column 2 dagen].”>when outage > 2 weeks]. in. There is then an essential process. In the [process criticality] column, enter EP.
  4. If the impact is such that the service is seriously compromised in the event of an outage that would last for more than 2 months or if there is a legal provision that requires a restart within a period of 2 weeks, you describe that impact in the column 2 dagen].”>when outage > 2 months]. It is then a necessary process. In the [process criticality] column, enter NP.

In the column [dependencies] you enter which expertise, logistic means, IT resources, … you need.
As described under point 2), you enter in column [criticality process] to which category the process belongs: time-critical, essential, or necessary
.

Process Impact when outage  > 2 days Impact when outage > 2 weeks Impact when outage > 2 months Dependencies criticity process
[name process] [Description] [Description] [Description] TCP/EP/NP

 

Two examples:

  • The crisis management process. If this starts only after an hour, serious reputational damage can already be caused by, for example, incorrect communication in the media. It must therefore certainly be started within two days. The 2 columns next to it need not be filled in anymore. With the dependencies, you put eg the expertises, the meeting room, laptops, smartphones, communication tools etc. In the last column you place the decision of the chosen type of process, in this case TCP.
  • Process X must be able to start up within 5 days in August, because otherwise a rule from the legislation can be violated, with corresponding fines and reputational damage. 2 dagen].”>when outage > 2 weeks’ and you choose the type of process ‘EP’. In dependencies you can, for example, write communication with the bank, the name of an an administrative employee and the right software program.


This choice of type of process (TCP, EP or NP) can then be adopted one by one in the Business Impact Analysis. The dependencies can also be taken over.