28 July 2018

Certainty: Solutions for an Unpredictable World...

As the moon rises on a distant horizon, vital leaders across our globe are gaining new strategic foresight to continuously adapt their enterprise.

The future horizons in the mid-2000's are now on their mind and for good reason.  All of us are operating at increasing speed, in an unpredictable world:
What is the certainty that the Operational Risks in the next 20 years, will be a replay of the variety and spectrum of loss events we have witnessed in the past 18 years.  The difference is that they are accelerating.  What have we learned?  What are we doing about it?  How are we changing?  Why?

Solutions for resilience in motion in our "Unpredictable World" span the domains of people, processes, systems and external events.  Operational Risk Management (ORM) is a discipline that can be applied in most any size enterprise including government.

When you are seated around the meeting room with your leadership team, what do you see?  People who are in charge of teams, business units, departments, subsidiaries, portfolio investments and other assets of the enterprise.  You are counting on them to be prepared, to be predictive and to be proactive.  Are they?

You see, after all of the lessons learned and the After Action Reports (AAR) have been written and published, it seems to come back to the fundamentals.  It is history repeating itself.  Will our future world continue to be unpredictable?

If you said yes, then what are you doing about it?  Let's go back to that group of leaders sitting around the conference table.  Who have they engaged outside your enterprise to back them up to help them be more prepared, predictive and proactive?

The truth is, that you are behind the solutions curve.  Even your simple, yet effective Business Continuity Plan is outdated and gathering dust on the bookshelf.  The crisis team is far too preoccupied with the next news story or "Tweet," that may have an impact on the stock price.
The truth is, our unpredictable world is actually certain and we only have a limited amount of time until the next crisis, to prepare and adapt...

21 July 2018

Remember His Name: The Long War Ahead...

"Edward Wilson believed in America, and he would sacrifice everything he loved to protect it."

In "The Good Shepard" Matt Damon's character, Edward Wilson, is partly based upon the founder of the CIA's counterintelligence operations, James Jesus Angelton. As we look back over the past year, one can only wonder what Mr. Angelton would have to say, if he were alive today.

This September 11, 2018, brings all kinds of thoughts and emotions thinking about what our world has become since the days after World War II. Edward Wilson and Jim Angelton were both focused on the risks of finding out the truth.

Getting answers to questions that few others would even contemplate to ask. For the love of their country alone.

We are reminded of other professionals with the same mission. On September 11th, 2006 on the cover of Sports Illustrated Magazine, sits another patriot in a tree near the Afghanistan-Pakistan border. His name is Pat Tillman.

And as the SI cover story title says: "Remember His Name." Journalist Gary Smith captures the essence of what it means to walk in the shoes of men like Pat Tillman, who seek answers even more than life itself.
Everybody who thought he'd enlisted purely out of patriotism, they missed reality by a half mile. Sure, he loved America and felt compelled to fight for it after more than 2,600 people at the World Trade Center were turned to dust. But his decision sprang from soil so much richer than that. The foisting of all the dirty work onto people less fortunate than an NFL safety clawed at his ethics.
He had uncles and grandfathers on both sides who'd fought in World War II and the Korean War, one who'd taken a bullet in his chest, another who'd lost a finger and one who'd been the last to leap out of a plane shot from the sky. On a level deeper than almost any other American, he'd reaped the reward of those sacrifices: the chance his country afforded him to be himself, all of himself.

He yearned to have a voice one day that would carry, possibly in politics, and he was far from the sort of man who could send others into a fire that he had skirted. His relentless curiosity, his determination to live his life as if it were a book that would hold its reader to the last word, pushed him into the flames as well. The history of man is war, he told a family member, so how, without sampling it, could he ever know man or himself completely?
The Operational Risks we choose to face as professionals, keeps us focused on the fears that haunt us most. Someday, we hope that the fear will disappear, if we face it long enough and often enough. And then it dawns on us, that this will never happen. The "Long War" ahead will not have an end point.

Nor will it's end, ever be celebrated with a ticker tape parade in New York City.

The long war ahead, requires leaders who understand what Jim Angleton and Pat Tillman both have in common. It begins with a renewed hope for conquering the fears ahead...

15 July 2018

Enterprise Risk: The Future of Public Private Partnerships...

When it comes to the overall Business Resilience in a city or geographic region, there are a plethora of Public Private Partnerships that have been in development for decades between government entities and the private sector.

The goal for some, is the simple exchange of information on relevant topics of community and local or federal jurisdictions. Others have a very distinct role and measurable outcomes designed into their structure, to achieve a mutual purpose. The Houston Ship Channel Security District is a rare example:
The Houston Ship Channel Security District, a unique public-private partnership, improves security and safety for facilities, employees and communities surrounding the Houston Ship Channel.
There are other Public Private Partnerships (PPP) that help address the safety and security of the United States, including the FBI's InfraGard program. This is an approach to engaging with private and public sector individuals in a region or sector of critical infrastructure, as opposed to a specific business entity.

The combination of an individual-based intelligence sharing organization of subject matter experts, combined with a more business owner-operator and city, county and state governments model, is one that needs continuous care and oversight to remain effective.

There are hundreds of other local and national models that converge on the goal of a true public private partnership, that never achieve excellence. They continuously miss the mark from several levels of information exchange, coordination, cooperation and collaboration.

These failed attempts at getting the private sector working in concert with government, still comes back to one key criteria for success; people. Regardless of whether you have the funding resources or not, a single or handful of motivated, dedicated and smart people, can and will make the relationship work.

Simultaneously, people can also be the roadblock, the resistance or the problem in getting a public private partnership working as effectively as it could be, to achieve the mission. This is when the mechanisms of governance, oversight and common sense are needed to guide the respective initiatives and operations of the entity either public or private, in the right direction.

You only have to look at the leadership in many cases to understand why there is continuing success in achieving SMART objectives or why there is failure. Service before self-interest is what becomes a major facet of why many of these organizations perish and then you have to examine who is really the beneficiary of the work being done by these dedicated volunteers.

Another effective public private example is the Intelligence National Security Alliance (INSA):
"INSA provides a nonpartisan forum for collaboration among the public, private, and academic sectors of the intelligence and national security communities that bring together committed experts in and out of government to identify, develop, and promote practical and creative solutions to national security problems."
When you are able to converge the thought leaders from a particular vertical discussion area, to produce the best thinking on an Operational Risk topic, the output is extraordinary. The key is to keep these same set of thought leaders together long enough and often enough, for the trust factors to build and for the true sense of collaboration to emerge.

INSA has accomplished this with the "Homeland Security Intelligence Council". Formed in 2010 and now renamed the "Domestic Security Council" and working continuously on a monthly and even bi-weekly basis, they have produced several valuable outcomes from their work together. One example is the white paper produced soon before the tenth and also the fifteenth anniversary event of 9/11.

Homeland Security Intelligence is a discipline that depends on the successful fusion of foreign and domestic intelligence to produce the kind of actionable intelligence necessary to protect the homeland. INSA is one private private organization that realizes this more than others.
The key to public private partnerships in the U.S., the "Enterprise" is not just government when it comes to intelligence and situational awareness. One only has to look at the number of iPhones and camera enabled devices being carried around by hundreds of millions of people to understand this today. Social Media and global real-time information discovery will remain our continuous situational awareness challenge.

The private sector companies, who in many cases are the owners of critical infrastructure assets in the nation remain the power base. The willingness or reluctance to share the right information at the most appropriate time from government and combine it with private sector capabilities, will always be the largest challenge for the public private enterprise going forward.

08 July 2018

ORM: The Science & The Art...

Operational Risk Management today is a true "science", with the "art" becoming more of a key component in connecting the dots. Yes there are plenty of standards from various disciplines to assist professionals in the assessment and measurement of risk.

The tools that have been developed over decades to help predict risk, dates back to the insurance industries inception. Actuaries are indeed a key component in this evolution of the science. What happens when you put several other factors into the equation? Like dates in time when various events are converging on a single window of potential risk consequences and implications:
Actuaries are those with a deep understanding of financial security systems, their reasons for being, their complexity, their mathematics, and the way they work (Trowbridge 1989, p. 7). They evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events.

Actuarial science
applies mathematical and statistical methods to finance and insurance, particularly to risk assessment. Actuaries are professionals who are qualified in this field through examinations and experience.

Actuarial science includes a number of interrelating disciplines, including probability and statistics, finance, and economics. Historically, actuarial science used deterministic models in the construction of tables and premiums. The science has gone through revolutionary changes during the last 30 years due to the proliferation of high speed computers and the synergy of stochastic actuarial models with modern financial theory (Frees 1990).
The art of Operational Risk comes into play with practitioners and professionals who have the "Grey Matter" to see the big picture. They have the ability to think like the enemy, or examine the window of opportunity. Working with windows in time and the ability to see the convergence of particular events, allows for the creation of scenarios, to draw more strategic insight.

This ability to create filters and extract true meaning from raw data, segmented information and then from cognitive analysis creates the true vision we seek. This is an "Art" as much as it is a "Science".

Forecasters in the hurricane, typhoon and tsunami warning centers around the globe know the meaning of using the science as much as the art of risk management. The nexus of security and terrorism puts another dimension on the meaning of operational risk management and now you have the Terrorism Screening Center (TSC) assisting with the fusion of intelligence to counter potential individuals from terrorist acts.

If you were planning an event for your organization in downtown Washington, DC for the 3rd week in July 2018, what are the factors that are taken into consideration? Have you scheduled to fly in all of your key executives for a Board of Directors Meeting and a round of golf at RTJ?

What about all of the other events and organizers who have made the decision to hold their event the same week or day in July? What impact will any of these other events have on you and your organizations ability to facilitate a safe, secure and productive meeting for your participants, members or customers?

The truth is, that many event planners and organizers are not even tied into the same database or the systems as the Chief Security Officer. The CSO in many cases is not aware that the sales or marketing organization has scheduled a customer summit or new product kick-off the same time as a scheduled anti-[insert activist group here] march. Or maybe it's just a PGA golf tournament.

So what? So what does the "science" of operational risk have to do with the "art" of operational risk?

Think clearly and use both when it comes time to develop your own "Fusion Center" for risk in your organization. Make sure you include the people and the data that could create the perfect storm when a combination of events all take place within the same time window. There are only so many hotels, convention centers and airports for people to utilize for the logistics of these meetings.

The competition is fierce to get the location, dates and venues you seek to impress your audience. It's not always about the number of things going on at the same time, it is the combination of each unique entity that makes the "Art" of Operational Risk imperative.

Any combination of ingredients by itself can be harmless. But when you mix them together in the right amounts, in the right place, you could be facing a loss event that could not have been predicted looking at the science alone...

01 July 2018

4th of July: Risk of Complacency...

This new nation state is turning 242 years old on July 4th, 2018. The United States of America will be celebrating another birthday and the Republic, will reflect on what we have learned, so far.

"Rule of Law" is an ever so powerful component of a democratic way of life and is the envy of so many nations who still seek its most true form. Operational Risk Management permeates the essence of the laws and rights of U.S. citizens in the work place, companies and organizations in global commerce and the government who provides oversight on all of it.

The balance of power between individual citizens and the government responsible for the protection of life, liberty and the pursuit of happiness is always in flux. Yet in the end, "The Union" has endured some of the most significant "Operational Risks" and disruptions one can imagine.

It is the analysis of "The Union" and the incredible resilience of all the moving parts that make the United States what it is today. Weathering the storms of mother nature by hurricanes, tornados, earthquakes and droughts to the economic threats of depression, mortgage or Wall Street implosion has not put a dent in "The Union's" ability to bounce back.

Withstanding the challenges to our Constitution and the rights proclaimed to each and every citizen, has only made us stronger. What cases to the Supreme Court have changed our future?

When you look at your own organization and examine the components of your people, processes, systems and potential external events, does it have what it takes to endure 242 years? Certainly there are risks that exist today that are prevalent in the eyes of shareholders, Board Members and even executive management.

The question really is "What are you doing about it?" This in itself, could be the biggest threat to the United States and your own organization. Complacency.


[kuh m-pley-suh n-see]
  1. a feeling of quiet pleasure or security, often while unaware of some potential danger, defect, or the like; self-satisfaction or smug satisfaction with an existing situation, condition.
It is the perception of the quiet pleasure or security of your organization or your own country, that may very well be the greatest threat to it's existence. Ignoring the cues and clues to the deterioration of the balance of power, the rule of law and the economic engine necessary to sustain the necessities of life, such as food, water and cash flow may be the reason for your demise.

Your own business resilience will continue to be a factor of the correct mixture of the ingredients that sustain and organically grow the enterprise. Those who try to grow to quickly without regard to quality will in many cases fail.

Those who let the power base become significantly imbalanced, so too will find the ability to endure a tremendous hardship. Those who ignore the constant requirement for monitoring and governance will suffer the realities of human factors. Motivations that are often defined as greed, jealousy and hate, soon will emerge.
"Relationships remain vital to our family unit, the neighborhood we live in and the cities, counties and states that oversee our way of life."
It is those same relationships within our business and government ecosystems, that will determine whether they perpetuate your healthy growth, or its inevitable deterioration.
Those same family units, neighborhoods, and government jurisdictions have the power and the ability to avoid complacency and mitigate the Operational Risks that will be present in each. Look around the country of the United States or the nations of the world and you will see who has been complacent, and who has been the most effective in OPS Risk Management.

"I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."

The flag consists of 13 alternating red and white stripes that represent the 13 original colonies, and 50 white stars on a blue field, with each star representing a state. The colors on the flag represent:
  • Red: valor and bravery
  • White: purity and innocence
  • Blue: vigilance, perseverance, and justice
Happy Birthday Uncle Sam!