The duo dove into a topic that’s been thrust into the spotlight in light of the spread of the novel coronavirus and the ensuing COVID-19 pandemic – how to best manage operational risk and uncertainty.
How well organizations were prepared for the unknown – or not prepared at all – has been revealed by the current period of uncertainty. But how, even if an organization came up short in this instance, can they prepare for the unknown that lies ahead?
First, the pair said, it’s key to outline some key distinctions.
“It’s important to distinguish uncertainty, which is all the stuff out there in the future that we don’t know exactly how it’s going to turn out … (from) risk and opportunity. There are a lot of uncertainties, but only some of them could have a negative impact, potentially, on our operation, supply chain, or project,” Browning said.
“We call these threatening, negative potential outcomes risks.”
While uncertainty and risk are certainly words that come with highly negative connotations, there are ways to navigate them.
“Overall, I like to use the kind of classical, standard five-step process for managing risk and opportunity,” Browning said. “It’s very general, and people use it more or less in many cases. It’s a good starting point.”
Those five steps are identifying risks and opportunities, assessing them, prioritizing them, responding to them, and continuing to monitor them.
To get a more in-depth idea of what goes into each step, listen to the entire episode.