28 July 2014

Global Pulse: Resilience in Development...

The asymmetric threats cast upon the private sector on a daily basis across the globe, are rising and more complex.  As a result, Operational Risk Management is a discipline that has quickly matured in the past decade.  

Today, as we embark on this blog post number 1060 we can reflect on our amazing journey.  When you search Google from our location on "Operational Risk Management Blog" this blog is the number 1 link.

This endless journey encounters new insights and has transversed industry sectors to include financial services, energy, automotive manufacturing, aerospace, defense industrial base, pharmaceuticals and government both local and federal.  It has involved the following four fundamental principles of ORM:
  • Accept risk when benefits outweigh the cost.
  • Accept no unnecessary risk.
  • Anticipate and manage risk by planning.
  • Make risk decisions at the right level.
Whether the oversight and pursuit encountered the risks of fraud, economic espionage, workplace violence, natural disasters, terrorism or cyber vulnerabilities does not matter.  The threats and hazards that span the spectrum of Operational Risks to the enterprise are vast and increasingly diverse.  The discipline continues the quest to improve and to learn new lessons from both the private sector and government.  Now both of these need to also include a third dimension, that is evolving and could be the place to look for real innovation:  Non-Governmental Organizations. (NGO)

The NGO community is the environment that has now gone beyond response and is finally becoming more predictive:
Global Pulse is a United Nations initiative, launched by the Secretary-General in 2009, to leverage innovations in digital data, rapid data collection and analysis to help decision-makers gain a real-time understanding of how crises impact vulnerable populations. Global Pulse functions as an innovation lab, bringing together expertise from inside and outside the UN to harness today’s new world of digital data and real-time analytics for global development. The initiative contributes to a future in which access to better information sooner makes it possible to keep international development on track, protect the world’s most vulnerable populations, and strengthen resilience to global shocks.
There are plenty of situational awareness analogies that can be made to the risk management of vital private sector or government assets over the years.  Predictive operations have been evolving for years with the goal of preemptive capabilities to detect an attack on a Homeland.  The analysis of information from disparate sources is nothing new.  Link analysis and other methods of qualitative and human factors analysis give us the cues and clues to a possible evolving pattern of human behavior.

Yet what is fascinating now about the NGO perspective, is the intersection of Big Data and the mobile phone:
Wherever people are using mobile phones or accessing digital services, they are leaving trails behind in the data. Data gathered from cell phones, online behavior, and Twitter, for example, provides information that is updated daily, hourly and by the minute. With the global explosion of mobile phone-based services, communities all around the world are generating this real-time data in ever-increasing volumes. These digital trails are more immediate and can give a fuller picture of the changes, stressors, and shifts in the daily living of a community, especially when compared with traditional indicators such as annual averages of wages, or food and gas prices. This is especially crucial during times of global shocks, when the resilience of families and their hard-won development gains are tested.
These global shocks that are economic, geopolitical or as a result of climate change are at a macro level nothing more than environmental volatility.  This volatility in markets, government leadership, religious conflict and drought are what is driving the NGO development community to be more predictive and to be more preemptive.

In concert with this focus on predictive intelligence is the initiative "data philanthropy".  How can the data sets from our respective countries be shared to work on the really hard global problems together?  Open Data Sites is just the beginning.  You have to make sure that you recognize the attributes of "Big Data for Development" vs. the private sector or purely government:
Big Data for Development sources generally share some or all of these features: 
(1) Digitally generated – i.e. the data are created digitally (as opposed to being
digitised manually), and can be stored using a series of ones and zeros, and thus
can be manipulated by computers; 
(2) Passively produced – a by product of our daily lives or interaction with digital
services; 
(3) Automatically collected – i.e. there is a system in place that extracts and stores
the relevant data as it is generated; 
(4) Geographically or temporally trackable – e.g. mobile phone location data or
call duration time; 
(5) Continuously analysed – i.e. information is relevant to human well-being and
development and can be analyzed in real-time;
What if the private sector and the government started looking through a different lens?  Or perhaps the other way around.  Is the NGO development community capable of learning from the mistakes with data that intersect with privacy and national intelligence?  Operational Risk Management is just as much an imperative in the NGO environment, as we evolve in the integration of Big Data for global humanitarian initiatives.

When you really look at the opportunity and the challenge ahead, you must consider this intersection of data today in context with where development is still in its infancy.  Look at this visualization of Google search volume by language.  Notice the darkest parts of the planet Earth.  These are where the NGO community lives today, with little access to the Internet, regardless of language.  The human resilience factor necessary to evolve in these non-connected IP (Internet Protocol) deprived areas of the world, must be addressed as we aspire to become more predictive risk managers.

13 July 2014

ID Analytics: Risk of the Unknown...

Operational Risk Management (ORM) has been at the top of the news in the past few weeks.  Digital media and the metadata of "Big Data" is the topic of choice.  It is a revealing look behind the curtain of what is possible these days, with the tools and capabilities that exist for exploitation and analysis.  Is too much privacy an operational risk to your personal and professional well being?  What "Trust Decisions" did you make to arrive on this page in the universe of the Internet?

In the spirit of full disclosure, if you are reading this now, we tracked how you found this blog and perhaps what search terms you used to be referred here.  Some of you, revealed their company identity. So why do we do this?  The main reason is that we want to make sure that we understand what is on your mind these days, when it comes to the global Operational Risk Management (ORM) universe. Here are a few examples in the past day or so that caught our eye:
  • management of operational risk - Latvia
  • operational risk management - Nigeria, Illinois, South Dakota, The Vanguard Group
  • common board of directors mistakes - Turkey
  • lessons learning from fail in operational risk - Malaysia
  • predictive intelligence - North America
  • rogue trader operational risk - United Kingdom
  • fund industry operation management discussion topic - Luxembourg
  • operational risk management game - Unknown
  • reputation risk management process - Unknown
  • operational risks in bank call center - Qatar
  • coso definition of operational risk - Unknown
  • black swan incident that occurs once in a lifetime - Unknown
  • ubs operational risk case analysis - Unknown
  • business resiliency definition - JP Morgan Chase
  • "operational risk" outliers - France
  • a risk effect on a daily operation - DeVry
  • examples of smart objectives risk - United Kingdom
  • black swan incident\ - South Carolina
  • black swan incident - Computer Sciences Corporation
  • what is a black swan incident - South Carolina
  • duty of care board of directors - United Kingdom
Collection of data is one thing.  Relevance and sense-making is another.  Can you imagine some of the search terms that are tracked just by Google or Bing?

What about the companies that know us the best?  Those marketing and personal data sites that keep track of where you live, how much you spend on your credit cards and where, or even the name of your pets.  How often do you give them your phone number or e-mail address at the point-of-sale (POS) to get a discount at the local retailer, gas station or pharmacy?  Believe us when we say that there are hundreds of organizations that know more about you in the private sector than some government across the world.

The trail of "digital finger prints" you leave behind everyday are vast.  A snap shot of your face at the local ATM or a snap shot of your desktop when you login to the online banking web site.  In either case, these examples are just a few of the ways that your habits, locations, preferences and lifestyle are profiled each and every day.  Where did all of this begin?  Fraud Management.  Not Homeland Security.

As a citizen traveling across the country or a consumer, you willingly give up these digital bread crumbs of your journey through life.  Your goal now, is to make sure that you are not mistaken for someone else.  After all, you or your organization have developed a profile and a reputation that is being recorded and therefore, it could be a prudent strategy to make sure that you are not mixed up with another person or organization with the same name or brand identity.

How can you do this?  Operational Risk Management (ORM) is about monitoring yourself and your organization to make sure you understand your competition (good or bad) for the same personal or business identity space.  Do you have Biometric and DNA samples of all of your key executives?  If you don't, then the question is why not?  You may have considered this in light of some of the places that your executives are traveling.  Cities and countries across the globe with the risk of kidnapping, improvised explosive devices (IED) and other risks to their lives.

As we look into the crystal ball of our digital futures, we see the scenes from movies past that have already captured our own human imagination.  A world where everyone is known and you may even choose to "opt-in" to be tracked.  After all, you are unique.  You make your own choices in life.  The risks that you face may very well be greater, for those who choose a life to remain private, anonymous and even unknown.

06 July 2014

4th of July: Resilience of Your Team...

The United States is celebrating the birth of the American nation this weekend.  238 years ago the formation of the Republic set the course for the country that it is today.  The Declaration of Independence was born.

A key aspect of any prudent Operational Risk Management (ORM) program is focused on people.  The risk of people and the whole dynamics of what is going on in peoples lives.  As Thomas Jefferson, John Adams, Ben Franklin, Robert Livingston and Roger Sherman toiled over the draft; what do you think was also going on in their individual lives at the time?
While political maneuvering was setting the stage for an official declaration of independence, a document explaining the decision was being written. On June 11, 1776, Congress appointed a "Committee of Five", consisting of John Adams of Massachusetts, Benjamin Franklin of Pennsylvania, Thomas Jefferson of Virginia, Robert R. Livingston of New York, and Roger Sherman of Connecticut, to draft a declaration. Because the committee left no minutes, there is some uncertainty about how the drafting process proceeded—accounts written many years later by Jefferson and Adams, although frequently cited, are contradictory and not entirely reliable.[62]What is certain is that the committee, after discussing the general outline that the document should follow, decided that Jefferson would write the first draft.[63] The committee in general, and Jefferson in particular, thought Adams should write the document, but Adams persuaded the committee to choose Jefferson and promised to consult with Jefferson personally.[2] Considering Congress's busy schedule, Jefferson probably had limited time for writing over the next seventeen days, and likely wrote the draft quickly.[64] He then consulted the others, made some changes, and then produced another copy incorporating these alterations. The committee presented this copy to the Congress on June 28, 1776. The title of the document was "A Declaration by the Representatives of the United States of America, in General Congress assembled."[65]
The ecosystem of this set of committed custodians of a new nation also included the personal lives of each one of them.  No different than the ranks of any organization who has executives and key staff members who are steering the daily direction of the enterprise.  Each individual on that team has a work life and a personal life they are managing simultaneously while doing the work of the country or the corporate business.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness, That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
So think for a minute about your team within the enterprise.  Each person on your staff or within your division is managing and coping with life events that are occurring in real-time each day.  How much are you in tune with all those emotions and potential changes in a fellow employees life, to see how it may impact their work?

Organizations across the globe utilize Operational Risk Management (ORM) as a discipline for those safety and security events that could produce significant risks.  The same can be applied to each person and their individual ecosystem.  Each person on the team may be in different phases of their lives and need only a few pieces of the entire ORM mosaic for their personal lives.  Contingency planning however is still one of those easy exercises that most people can do on their own and in their own personal environments.

The power of the "What if" questions that you ask yourself on a daily basis is a healthy way to begin and to continuously provide effective Operational Risk Management (ORM) outcomes.  "What if" you developed a ORM college within the enterprise to educate all those new employees and existing with the skills, knowledge and capabilities available to them?  As they say "Life Happens."  Each person shall have an ecosystem of both personal and professional risks that they are encountering every day.

It could be imagined that people such as Ben Franklin had a few other items on his mind at the time.

The person to your right and to your left on the front lines of the organization, who you engage with everyday; has their own set of risks to manage in life.  A strategy for each individual to better plan, develop and deploy effective risk management individually provides the entire team with the focus they require long term.  They have been trained on using the effective continuous process for ORM:
  • Identify
  • Assess
  • Decide
  • Implement
  • Audit
  • Supervise
Imagine your organizational unit, whether it be Congress, your Family, your work out partners at Pilates or the entire executive staff all in synchronicity, with the use of Operational Risk Management. The principles of enhancing your life or your country will require a life long devotion to the rules and to the risks to a breakdown in rules of governance.  Personally or professionally.

Consider the peace of mind as your country endures the challenges to it's "Declaration of Independence" and knowing that it has a longevity of 200 plus years.  Think about the confidence and the assurance you will have about your team or family unit as each of them manage their life events and risks.  The resilience factor is strong and the safety and security of the people you care about the most, will endure.