19 September 2020
Mikhail Treyvish, founder of the Universal crowdsourcing agency OmniGrade, factoring professional with 25 years of experience, shares his insights with the WOA Community.
In 2020, a risk that no one had warned about except Bill Gates and the scriptwriters of Hollywood blockbusters was realized.
And suddenly it turned out that no one was waiting for it, and no one knows how to manage it. And if no one was ready to manage the main risk of the year (and, perhaps, the main risk of the decade), then it means that we simply did not have risk management.
It was nowhere to be found: neither globally nor locally, nor in banks, nor in factories, nor in airlines.
Or it was at a very primitive level, focused on the systemic risks that everyone was used to. For example, the risks of emergency situations on aircraft board. But the risk that planes would not take off at all, because no one was able to fly, since the borders were closed, was not considered at all.
In general, the management of non-systemic risks has always been bad everywhere. However, I was born in a country that was very well prepared to manage one non-systemic risk. The country called the USSR, and the risk was a nuclear war. I don't remember very well the university civil defense course, but I still have the feeling that it was thought out to the smallest detail where to run (or crawl) in case of the appearance of the nuclear mushroom cloud.
If we were prepared for a pandemic as thoroughly as the Soviet Union was ready for a nuclear war, then there would have been no pandemic long ago.
So risk management has to come back, and it does.
But it becomes (or rather should become) different.
And, in my opinion, we should expect four major changes.
1. Risk management is no longer the business of risk managers.
Risk management issues have to be solved in absolutely any company and organization at different levels. Yes, in fact, each person now has to solve personal risk management issues much more often. For example, during the peak of the pandemic, the question "Should I leave the house and go to the store today?" becomes a typical risk management issue. And not everyone will hire personal risk managers for himself. Though, one can expect that a certain category of people will get personal risk managers in addition to personal chefs or personal butlers.
2. Identifying latent and non-systemic risks and managing them becomes a top priority.
With traditional, systemic risks, everyone knows how to manage. However, the most serious negative consequences may arise from non-obvious, hidden risks, the identification of which becomes the most important and at the same time very creative task. Signs of latent risks are sometimes very subtle and strange. For example, I recall my personal 25-year experience in the factoring industry, where one of the worst hidden risks is customer fraud. So, one of the clear signs of hidden fraud is the absence of overdue debts, which seems to be nonsense to a "normal" risk manager.
And, by the way, one of the tools to identify hidden risks can become crowdsourcing - my new passion. Indeed, in order to imagine what unusual risks a person, company, organization, country, or all of humanity may face, you need a strong imagination and broad horizons, which someone in the open community of volunteer associates (i.e., in the crowd) will certainly have.
3. Procrastination is no longer a risk management tool and diversification becomes one.
Until recently, the" mantra" of risk management was: if you don't want to face new risks, start fewer new projects. This stops working, because at one point a key business of a company or an organization is completely blocked by a realized non-systemic risk.
And then diversification, the intention for which forces to open new projects, becomes a risk management tool. Let's look again at airlines as an example. While writing this article, I came across the news about the opening of Thai Airways cafe in Bangkok, where visitors sitting in chairs similar to those in aircraft cabins are offered on-board menu dishes. Here is a great example of diversification, but a little belated. I'm sure that if one of the airline managers had suggested going into the restaurant business before the pandemic, his colleagues would never understand him. But this is not only an anti-crisis measure, but also a natural step to expand the company's monetization channels. And, by the way, even in a completely calm and healthy time, such cafes and restaurants can have a lot of visitors. For example, people who usually fly in economy, for whom visiting such a restaurant can help experience the charm of business or first class service without buying the costly ticket. And, by the way, crowdsourcing can also play a significant role in finding new directions for business development in order to diversify it (and, therefore, to manage risks). Though not only it, of course.
4. The risks are no longer scary.
Because if we realize that we know how to manage risks, we stop being afraid of them.