What Should Businesses Do When Disaster Strikes? A Study in Risk Management

According to a recent study by the Risk and Insurance Management Society (RIMS), nearly 50% of all risk professionals agree that risk management is included in a company’s strategy planning to help identify any risks arising from strategic planning. What makes this fact even odder is that only 15% of risk managers find themselves a full member of any strategic planning team. That could be about to change though, according to www.insurancejournal.com.

Risk Managers and Their Job

Risk managers help companies anticipate future risks in relation to business, as well as when it comes to dealing with disasters in the local area, which can impact day-to-day business and the lives of their employees. Furthermore, they help develop risk management plans that are then integrated into a company’s disaster response plans.

Lessons from Past Disasters

Risk managers also look at past disasters and develop plans for dealing with similar situations. This includes keeping in mind worst-case scenarios, something which was not done when it came to planning for disaster response at the Fukushima nuclear power plant, for example. It was risk managers at Tokyo Electric Power who determined that any tsunami wave would not top 19 feet, a miscalculation on their part, as tsunami waves 50 to 70 feet high wrought devastation upon the area.

Dealing with Future Disasters

If risk managers keep in mind the ultimate worst-case scenario in any situation, disaster planning should be more effective. And as each disaster happens, the lessons learned from the latest disaster need to be applied to future such crises. Only in this way can companies learn, grow, and survive.

Communication in the Face of Disaster

In the wake of the Boston Marathon bombing, few can argue that cell phone service to the area was severely hampered. The real reason for the slow down, despite rumors to the contrary, was caused by the sheer volume of calls that local cell service providers were asked to handle. This used a lot of bandwidth, which in turn led to a slowdown of cell service, affecting cell phone customers and first responders alike.

In these instances, risk managers need to develop plans to not only take into account what to do when communications go down, but also how they can help facilitate a reduced workload when it comes to cell communications, such as texting or emailing instead of calling. This in turn will reduce the amount of bandwidth being used and make it easier for those who do need good communication in a disaster (e.g., first responders) to communicate.


For more information about the role of risk managers in an organizations, visit:
http://www.insurancejournal.com/news/west/2013/04/22/289400.htm
and
http://www.bankinfosecurity.com/blogs/boston-tragedy-offers-risk-management-lesson-p-1451