In this article I want to discuss what is going on with the COVID-19 pandemic with respect to risk. The first risk will be what every one is talking about, the others are only now being discussed. Before we dive in I am not a health care expert and so will be taking the position of an observer of what is happening around me, and to some extent, others who I know.
Here are three risks that I see:
The COVID-19 pandemic and it's bigger brother the COVID-19 panic,
The economic shutdown created by "Flattening the curve", and
The loss of rights and freedoms or commonly known as #StayAtHome
The last two are risk measures, or controls if you prefer, implemented for the purpose of protecting life against the effects of the first. However, these measures as important as they may be, are not without their own risks against life; as we will find out.
Three Risks
1. The COVID-19 pandemic and it's bigger brother the COVID-19 panic,
COVID-19 which is a variant of the corona virus has and continues to pose significant threat on life. Some say that this is not a Black Swan which is a risk that could not have been predicted. However, others say that it could have been anticipated and precautions made to deal with its possibility. Whatever the case, COVID-19 is now upon us. The window of prevention has closed and now the focus is directed at mitigating its effects by slowing down its transmission by reducing the number of those infected. This has been called, "flattening the curve," and its purpose is to save lives. You might say that the COVID-19 risk is now a reality and we are now facing the next risk which is, "COVID-19 Infection"
The following diagram is a bow-tie analysis (not exhaustive) which we will use to demonstrate the interactions between the uncertain event of being infected by COVID-19, the causes that would bring this about, and the consequences that arise if infected.
Preventive controls (or measures) are used to reduce the likelihood of getting infected. Whereas, mitigative controls are used to reduce the impact caused by the infection.
Shutting down the economy to essential services is one of the measures to reduce the chance of infection and perhaps an enabler to allow as many as possible to self isolate. These measures are expected to reduce and delay the number who get infected.
The forced economic shutdown while needed is itself a source of additional risk to life.
2. The economic shutdown created by "Flattening the curve"
Shutting down businesses, public spaces, transportation along with other elements of society is also a risk on life. Preventing this shutdown from happening is not possible. In fact, right now, compliance to these measures is exactly what is needed and critical to flattening the curve.
However, the longer this goes on the greater the chance that many, perhaps even more than the numbers of COVID-19 deaths, will lose their business, their livelihood, their marriages, and possibly their lives.The stress associated with financial loss should not be ignored and should be managed.
There is a saying that if you remove the means by which someone is paying off their debt you not only take away their livelihood you take away their life. (Deuteronomy 25:6).
3. The loss of rights and freedoms or commonly known as #StayAtHome
In attempts to flatten the curve many government institutions are amending by-laws and regulations to enforce public health measures. As and example, in Burlington, Ontario it is now illegal to stand closer than 2m to someone else on public spaces.
The majority of people will comply with these measures and do their part to help flatten the curve by self-isolating, shop for food only when needed, and otherwise staying at home.
However, there are some who won't and that is why governments have acted to remove freedoms.
What has surprised me, and perhaps others as well, is how quickly freedoms have been removed. The question that is on my mind is how quickly will these rights and freedoms be restored. Will we find that governments will use emergency measures more often as a solution to not being proactive in the past? Will they see this as a way of dealing with bad governance?
The removal of civil liberties is something that we should not accept lightly. We need to hold government officials accountable and to request from them plans and measures to restore all the freedoms that have been removed, livelihoods that have been lost, and how we will get back to life.
Pursuit of Opportunities
The pursuit of opportunities is an effective countermeasure to the negative effects of risk including those of COVID-19. Although, there is also uncertainty associated with opportunities as there is with threats. Therefore risk measures should also be used to improve the probability of realizing opportunities in the presence of uncertainty.
The following diagram looks at how risks and their measures are connected:
We will consider two of the effects: loss of business, loss of livelihood and consider how opportunities can be used to not only mitigate its effects but recover from them.
COVID-19 Infection (risk) --> Economic Shutdown (risk measure) --> Loss of business, Loss of livelihood (effects)
Here we use the bow-tie once again, but this time to improve the chances of an uncertain positive event which is the opportunites of: a new business, and a new livelihood.
We can take measures to enable each opportunity and should it be realized, how it can be exploited to maximize the positive effects or outcomes.
NEW BUSINESS
Causes that will bring about a new line of business:
Innovation
New Product Development
Pivot
Improving your chances of a new business:
Digital transformation
Customer engagement
Accelerate launch windows of NPI
Exploiting the opportunity to maximize positive outcomes:
Promotion
Networking
CRM
Consequences of a new line of business:
Increased sales
Increased profits
Increased stakeholder value
NEW LIVELIHOOD
Causes that will bring about a new livelihood:
Apply for new opportunites (i.e. jobs)
Improving your chances of a new livelihood:
Volunteer
Retrain
Go back to school
Network
Update CV
Exploiting the opportunity to maximize positive outcomes:
Mentorship
Networking
Volunteer
Take on new responsibilities
Consequences of a new livelihood:
Better job
Better circumstances
Better life
Summary
We see threats far more easily than we do opportunites particularly when we are in the midst of a crisis. However, that doesn't mean that the opportunities don't exist.
In Khaneman's book, Thinking, Fast and Slow, he helps us understand that we need to use a different part of our brain when considering things such as opportunities. Whereas, the fast part of brain is great at dealing with threats, efficiencies, and getting things done.
Risk measures can be put in place to prevent and mitigate the effects of uncertainty when they are negative and threaten what we value. However, measures can also be created to improve the probability of opportunities and increase their positive effects to protect and create new value.
Be Safe Be Proactive.
