Invest in the Right Risks
I have been in the security and crisis management field for nearly 25 years, holding leadership roles with NGOs (The American Red Cross, Save the Children US), the US Federal Government (FEMA, The Federal Reserve), and Fortune 500 Companies (Walmart, Disney). Interestingly, regardless of the sector I was in, I observed that most security/crisis vendors were focused on selling me and other leaders tactical goods so we could react to low probability but dramatic risks such as a terrorist attack or an active shooter incident. By contrast, the vendors downplayed the financial and employee impact of high probability but more run-of-the-mill risks such as a fire or a power outage.
These vendors were successful in accomplishing this because the fear factor for a terrorist attack is much higher than that of a fire or power outage, and leveraging that fear gets people to spend money. For example, in the late 2010s, I was part of a security working group tasked with developing a pitch to our organization’s board to increase funding for the security department. The group outlined the different risks they wanted to highlight- terrorism, bomb explosion, and active shooter. I raised my hand and said I recommend putting pandemic planning on the list since the probability and impact of a pandemic were significantly greater to the company than the risks my colleagues had mentioned. I was literally laughed at.
This myopic perspective on risks is not only shortsighted but ends up costing a company significantly more money. I have seen millions spent on products or gear without any thought to developing a strategy to decrease the stated risk or creating a culture where security is weaved through everyday business so fear can be reduced and employees are empowered to be situationally aware.
On the other hand, if an organization conducts a risk assessment and then creates plans and strategies to mitigate and respond to those risks, it will see significant cost savings at the back end of the crisis. FEMA estimates that for every dollar spent reducing risk, six to seven dollars will be saved from economic losses associated with recovering from a crisis. Additionally, the ancillary benefits of having a robust crisis management program in which an organization establishes a duty of care to its employees, supporting their safety and well-being during and after a crisis event, increases employee morale and creates company loyalty.
Taking a long-game perspective for security and crisis planning is one of the best investments an organization can make in its overall financial health. Thinking through how an organization will be able to stay in business after a crisis should be part of every business plan. Recall my earlier example regarding the ignored threat of a global pandemic? The global pandemic had a significant impact on that organization’s revenue. Imagine how different the financial impact would have been if insurance coverage options had been investigated, contingency plans created, and relationships built with local public health officials.
