Summer is just around the corner, and many of us are planning for our favorite warm weather activities - fishing, hunting, hiking, motorcycling, camping and more. All of our summer plans can be fun if we keep in mind the basics of operational risk management: Accept risk when benefits outweigh the cost; accept no unnecessary risk; anticipate and manage risk by planning; make risk decisions at the right level; assess and mitigate risk. Stated more simply, have a (prudent) plan, have a backup plan and have a wingman.
Whether you are focused on the safety and security of your personnel, the integrity and confidentiality of your information or the continuity of your business operations it's a fact that effective "Operational Risk Management" will improve your organizations resilience factor. The brilliance of Brig. Gen. Graper's emphasis on this subject away from the flight line or "The Office" , is his understanding that most of us will become more complacent the minute we hit the parking lot. You see, OPS Risk is not just something being advocated in the workplace. It's just as pervasive at home or in our own leisure activities. Whether you are climbing "Denali" or entertaining friends around the backyard pool, you have to be continuously in OPS Risk mode, or it could bring harm to life, limb or your own reputation.
Operational Risk includes the risk of litigation and there is one item you can be certain that is a threat to your corporate integrity. Employees, partners and suppliers to your organization:
Freddie Mac investors have filed expanded court claims accusing the mortgage finance company and three former executives of committing fraud by misleading them about risky loan practices and manipulating financial results.
The allegations, contained in a nearly 300-page court complaint filed late on Tuesday, are based in part on interviews with more than 100 former company employees and others who are described in the lawsuit as having knowledge of Freddie Mac's operations and finances.
One of the unnamed employees cited in the lawsuit is a former director of operational risk management at the company, who was quoted in the complaint as saying that Freddie Mac was an "appallingly run company" and that it was clear as far back as August 2007 that its capital position was inadequate.
Other so-called "confidential witnesses" cited in the complaint include a former Freddie Mac vice president of investor relations and an ex-senior examiner with the Office of Federal Housing Enterprise Oversight, the company's regulator, now part of the newly formed Federal Housing Finance Agency.
What most organizations the size and complexity of Freddie Mac under estimate, are the speed of change and the socially "connected" market economy. The blur of business combined with the "Holistic Blindness" of what risks are a threat today or this week, can bring an enterprise to it's knees and then to it's ultimate demise.
Whether it's buying and packaging financial assets to sell on Wall Street or keeping your F-22 Raptor in the air to defeat hostiles, OPS Risk is the differentiator. Your survival depends on it.