By DAN REYNOLDS, senior editor of Risk & Insurance®
Just try to draw a box around an industrial sector, a technology, or the limits of human stupidity, greed or arrogance. You know what? You can't do it.
The inside-the-box thinking was that no deepwater oil well could ever suffer a catastrophic blowout because the prevention technology was too good. We knew what we were doing. Check, wrong.
The inside-the-box thinking was that the speculation and lack of financial regulation that spawned the Great Depression would never again be repeated. Check, wrong.
The inside-the-box thinking was that the damage or terror of a Chernobyl or a Three Mile Island was behind us, that we could march forward in confidence and expand our dependence on nuclear power. Now, just look at what's unfolding in Northeast Japan. Check, wrong.
It may seem like an awful burden, but somebody's got to take it on, and that Dear Reader, and I don't mean that facetiously, is you.
It's not "mission creep" to posit that a to-the-nub analysis of everything that can go wrong or could go wrong in the furthest reaches of an organization be undertaken and that the human mind, that means your human mind, is capable of that task.
If we can build rockets to take ourselves and our attendant technology beyond the gravitational pull of our planet to our moon and beyond then we are fully capable of risk managing that adventure.
If we can manipulate molecules to create better drugs, sunscreens and wind-turbine surfaces through nanotechnology, then we have the ability to follow the trail of that technology, test for where it goes and where it has the potential to go awry.
There is only one thing that limits our ability to properly calculate or manage any risk that may be out there and that one thing is time. The risk manager needs time to assess risk and that means slowing down the salesman, the chief financial officer and everyone else in an organization or a country for that matter that puts profit before human safety, peace and health. Give the human mind time and it can account for any danger, but it must be given time.
The very phrases "inside-the-box" or "outside-the-box" are utter nonsense because there is no box. There is only the boundless human capacity to create and to manage the byproducts of that creation.
(Read Managing Editor Cyril Tuohy's counterpoint, "Risk Managers Need to Stay Inside the Box.")
May 1, 2011
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