Assessing Strategic Goals & Mitigating the Drift to Danger
Marco Felsberger
I help Risk & Resilience Managers build unique knowledge to become a top 1% Resilience Engineer, with innovative but proven Resilience Strategies | Master Risk, Resilience, Antifragility & Complexity
Risks are inevitable, and while predicting specific risks may be impossible, identifying trends that lead to adverse outcomes is within our reach.
The key to bolstering your company's resilience starts with the strategic goals set by management.
These goals, whether intentional or not, direct the entire organization’s actions and priorities.
However, when these goals focus solely (or mostly) on efficiency or cost-cutting, they can inadvertently undermine the company’s resilience.
Take, for example, a typical set of yearly goals for a company:
While revenue and cost-saving goals are often tied to bonuses, resilience-related measures like safety, security, risk management, and business continuity usually are not.
This discrepancy creates a "drift to danger," where the focus on easily measurable and incentivized goals leads to a gradual decline in resilience.
Over time, this makes the organization increasingly susceptible to smaller disruptions or, worse, catastrophic failures.
To illustrate, look at Boeing.
The company’s relentless pursuit of efficiency and cost-cutting compromised safety, leading to significant issues.
This starkly demonstrates the consequences of neglecting resilience.
Identifying these trends early can save your company from such headaches.
By analyzing how strategic goals impact resilience, you can spot where issues might arise.
This doesn’t require an exact science but rather an understanding of trends.
For example, when resilience is continuously reduced over time, smaller shocks can disrupt operations or even endanger lives.
You don't even need much data for it.
The real challenge is how to quantify and analyze this "drift to danger."
One approach is to model it as a system of interacting agents.
While this might sound complex, advances in artificial intelligence have made it more accessible. Using AI models like Claude AI and ChatGPT, I’ve developed methods to simulate and analyze these interactions, providing impressive and actionable insights.
Everyone talks about predictive analytics, but often, spotting risks is more straightforward than it seems.
By following logical trends, we can foresee potential risks before they fully emerge. For instance, company goals often emphasize efficiency and profit, overshadowing less tangible measures like security and reliability.
领英推荐
These neglected areas, though harder to measure, are crucial for long-term stability.
Consider the example of NASA in the 1990s with its "Faster, Better, Cheaper" mantra.
This drive for innovation and cost savings led to the Mars Climate Orbiter mission's failure due to a simple unit conversion error.
This error highlighted the trade-offs between speed, cost, and thoroughness.
Organizations naturally optimize towards easily measurable metrics like speed and cost, often at the expense of safety and quality.
As resilience managers, our role is to guide better decision-making starting from the goal-setting process.
By quantifying the potential impact of conflicting goals, we provide a clearer picture of the risks involved.
Recently, using Claude Sonnet 3.5, I quantified these impacts with interesting results.
However, it’s crucial to involve experts and not take AI outputs at face value, as AI can sometimes be incorrect.
Combining expert insights with advanced analytics, we can better navigate the complex interplay of strategic goals and resilience.
While predicting specific risks may be challenging, identifying and analyzing trends offers a strategic advantage.
By aligning your goals with resilience principles and leveraging advanced AI tools, you can mitigate the "drift to danger" and build a robust framework capable of withstanding unforeseen shocks.
Start with your strategic goals, recognize the importance of resilience, and ensure that your company is prepared to face future challenges head-on.
Have a great Weekend!
Marco
P.S. If you want to see how I analyzed the impact of conflicting goals on resilience over time, almost fully automated with AI, you have two options:
2. Get access to only this one Webinar for €10
CEO and Founder Associated Projects International
7 个月What a great document Marco. You have targeted one of the pillars why companies are not considering security risk management and/or resilience according to their real need. There is a perfect combination/storm: the resistance to understand what, why, how, where and when, and the incapacity of the SRM and resilience responsibles to navigate inside the turbulent corporate waters very much affected by phenomenons as P&L, BS and human ambition. We should not forget many C-Suite member are driving at short and medium term focus closely monitoring their bonus and not shareholders interests.