The old saying, "if you want to hear God laugh, make a plan," may be more true now than it has been for the last century or so. Back in the Paleolithic age when PowerPoint was a bright fire and shadow hand puppets on the cave wall, I belonged to the American Management Association. The big deal in those days was strategic planning, the capitalist version of Soviet Five Year Plans. We put endless hours into massive plans backed by huge spreadsheets run on electro-mechanical calculators about the size of a parlor piano.
A recent post on Medium.com by consultant Sam Hill, makes the point that planning much beyond the next five minutes nowadays may be an exercise in futility since our biggest variable is COVID and no one knows what will happen next. He runs three models based on reasonable but different assumptions about vaccines and treatments for COVID: maybe we get back to sort of normal by late 2021 or maybe never if we have an only partly effective vaccine and a similarly hit and miss treatment regimen. So there's your planning window - 1.5 years to infinity.
So what can you do other than throw up your hands and look into joining a cloistered religious order*? Here's a suggestion from Paul Carroll of ITL:
The first piece of advice I'd offer a CEO is, forecasts are out, dashboards are in. The notion that you can now forecast the economy, healthcare and other aspects of what can disrupt life, I think, is gone. Now we're in an environment where we've also learned that what you really need to have a handle on are the metrics, insights and what's actually happening on the ground - the dashboard of daily life.
Let's think about that for a moment. Even Jamie Dimon said at a recent news conference, when quizzed about JP Morgan Chase's projections for the balance of 2020: when you get down to it, we're really guessing. The best we can do right now is to be completely on top of where we are and any recent changes in directions or trend and what that might tell us about what McKinsey calls "the next normal."
What this suggests in terms of handling risks is that we need to be both agile (ready to pivot on a dime) and resilient with risk mitigations in depth. The hyper-efficient, single-threaded risk approach, mirrored by an elegantly thin policy portfolio, based on a broad agreement on what risks are or are not likely in this year of grace may have gone the way of the doilies and the anti-Macassars in your great-great grandmother's front parlor. If you are used to performing risk and policy evals annually, maybe you should rethink that. After all, what risks were we worried about last August? Can you even remember?
*During the economic crisis of the early 70s a Dominican monk, a good friend, shrugged at my fretting about the economy and said, "no matter what happens, I have a job."
What's On Your Summer Reading List?
Now that August is here, my friend, Anne Marije, CEO of 50 Company in Holland, recommends the following beach (or pool or mountain chalet or home with your feet up) books. Here are the English language editions (unless you want to learn Dutch):
Master Your Mindset: A Guide to Win the Inner-Game and Unlock the Power of Flow. A champion athlete explores the field of performance psychology to give you the tools to win the inner-game. Want to come back from COVID stronger, not just surviving? Hey, the risk management game is as demanding as any sport I know - and the stakes are higher.
The Grit Factor. Angela Duckworth, a University of Pennsylvania psychologist, began her studies of grit when she was teaching math to seventh graders. She realized IQ wasn't the only factor separating successful students from those who struggled, and that grit - holding steadfast to a goal through time - was highly predictive of success. Sound like anyone we know?
Train Your CEO Brain. Margreit Sitskoorn, professor of clinical neuropsychology at Tilberg University, is one of the EU's leading neuropsychologists specializing in business. Her newest work, The 50+ Brain, on optimizing the talents of those of us over 50 in the workforce is not yet available in English, but this earlier book provides an excellent introduction to a different and scientific way of thinking about how we succeed (or fail) in our work life.
Now for a different take on summer reading, check out the new list just put out by McKinsey & Company. This is a compilation of recommendations for beach books by movers and shakers across American business and media. Their list even includes a few novels, in case you're looking for a guilty pleasure or two.
Hey, doctor's orders
Quick Take 1:
Have You Re-Imagined Your GCCs?
OK, today's acronym is GCC for Global Capability Centers. We pause to consider the new trend in GCCs because this may be another of those areas in which adapting to our COVID-riddled world actually does some good. Much like figuring out the working from home puzzle or how to maintain personal relationships without traveling, the development of decentralized GCCs, profiled by McKinsey in a recent report, holds great promise.
The McKinsey report notes that "the disruption caused by the pandemic has irrevocably changed how GCC executives approach their operations. Some executives say that their organizations have navigated five or even ten years' worth of change in the span of a few months." For large companies, success in developing greater resilience in the GCC function is key and some 88% of the outfits surveyed reported that they had moved the great majority of the center's people to remote/in-home locations. McKinsey further notes that these organizations are now prepared to maintain remote working arrangements well into the future. The productivity of the refashioned GCCs is reported to be running at 100 to 90% of pre-COVID levels.
GCC operations are both complex and critical to organizational success across a wide array of functions, including ongoing oversight and management of major risk issues. As such, the success of re-imagined GCC units is a good proxy for overall operational effectiveness in making the COVID to post-COVID pivot in a number of areas:
• Remote working
• Digitally optimized organization
• Virtual talent management
• Remote and agile teams and processes
• Next gen remote infrastructure
• Next gen risk restructuring
If the GCC concept applies to your organization, the McKinsey report is important reading.
Quick Take 2:
New Dimensions in Data Breaches
Data related crime is like cancer; it metastasizes, spreads, takes on new forms and aspects. We've seen a few powerful examples in the last few months. A recent summary in workerscompensation.com shows us some instances. While none of the situations described may apply precisely to your operations, the ways in which one crime can spread into many may not be limited to drugstores and medical facilities.
Follow this: "In late May and early June, looters broke into Walgreens and stole prescriptions and hard drives from cash registers. Per a statement given to CyberScoop, health insurance information and vaccination records may have been included in the information that was stolen…." The point is that a riot and subsequent looting might lead to a data breach. Eh? Did you see that coming? How about those of you with local operations in Portland, Seattle, or Chicago?
Do you have retail operations? What's on the hard drives in your local cash and management systems? How well are they encrypted? Hey, how about company laptops used in the field? Sure, that's old news, but have these systems been hardened and upgraded against the ever more sophisticated methods of hackers in 2020?
The same retailer noted above took another possible hit earlier when an error in a new mobile app exposed personal email information. In all of these cases, we're not talking about a classic hacker attack or a phishing expedition, but rather about entirely different types of everyday incidents which could have similar, large-scale consequences. And what about that employee biometric data you're capturing as part of your effort to keep everyone safe and trace contacts? Biometric files* create a whole new cyber security task.
Managing cyber risk may not be that different from being an oncologist - an easily removed skin lesion, if left untouched, can turn into bone or lung or liver cancer when you least expect it.
*Biometric security data risks fall into the no good deed goes unpunished bin, in case you're wondering.
Have you tried this idea? We may get there before 2021.
Say It Isn't So...
Looks like a risk issue to us...
"Whether because they can't go on a real vacation due to infection fears or they simply fear losing their job when tens of millions of Americans are unemployed, many employees just won't stop working at a time when stress and burnout are likely off the charts." From Bloomberg.
For another view see a recent item from R&I on the impacts of widespread employee fatigue and what to do about it.
Words to Remember
Sign spotted in a bookstore recently:
Post-Apocalyptic Fiction has been moved to our Current Affairs section.
Post-apocalyptic decorating advice.