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Rethinking ERM in the Age of Pandemics and Cyber Crime: Part IX - Leaders Build Inclusive Institutions that Enhance Life-Long Learning and Mutual Understanding

2/26/2021

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We live at a time when humanity is steadily moving away from riskier forms of self-sufficiency to safer and more productive forms of mutual interdependence. Accordingly, the future of ERM will be concerned with building enterprise-wide approaches to pursuing opportunities and managing threats. Doing so requires leadership that promotes life-long learning and mutual understanding. 

“Our ability to analyze the genetic composition of any life form has made astonishing progress over the past ten years, but in many ways, we are at the very beginning of the genomic revolution. We have already seen amazing advances in our understanding of the way genes build organisms, but the application of that understanding - particularly in the realm of medicine - is only starting to bear fruit. A decade or two from now, we may possess tools that will allow us to both analyze the genetic composition of a newly discovered bacterium and, using computer modeling, build an effective vaccine or antiviral drug in a matter of days. At that point, the primary issue will be production and delivery of drugs. We’ll know how to make a cure for any rogue virus that shows up; the question will be whether  we can produce enough supplies of the cure to stop the path of the disease. . . . It will take the creation of public health institutions in the developing world - institutions that do not exist yet - along with a renewed commitment to public health in the industrialized world, particularly the United States. But we’ll have the tools at our disposal to deal with the emerging threats, if we’re smart enough to deploy them.”
- Steven Johnson, The Ghost Map, at 249 (2006) (italics in original; underline emphasis added).


The past several sections traced the story of vaccination and the eradication of smallpox. A disease that plagued humanity for over 3,000 years and killed more than 300 million people in the 20th century alone, the story of how the world slowly came together during a 200 year period (roughly 1780 to 1980) to eliminate smallpox is a fitting backdrop for thinking about the current pandemic and the future of ERM. What we have learned is that uncertainty is a permanent human condition but finding better ways to handle uncertainty and manage risk is an equally essential part of the human story. 

Advancements come when we get better at building inclusive institutions that are fueled by the relentless pursuit of formulating and testing hypotheses in order to solve problems. Historically, risk management, arguably one of our oldest disciplines, is at its best when its contributing and helping people to become engaged in pursuing positive change - another way of saying virtuous cycles. Accordingly, the future of ERM should be about supporting the pursuit of practicable action that leads to human improvement.

Before turning to thinking about ERM and the current pandemic, let’s look at another historical marker for insight about creating a culture where virtuous cycles predominate.  Steven Johnson’s 2006 book entitled The Ghost Map:  The Story of How London’s Most Terrifying Epidemic - and How it Changed Science, Cities, and the Modern World is our next stopping point. The subject of Johnson’s book is the cholera outbreak that took place in the Soho neighborhood of London in 1854 - almost 60 years after the study of infectious diseases was becoming a discipline through the pioneering efforts of Edward Jenner to develop a vaccine for smallpox.

Today, unlike the mid-19th century, it is well known that cholera is a bacterial disease usually spread through contaminated water. Still producing 3 to 5 million cases and over 100,000 deaths annually in disadvantaged populous cities in India and Southeast Asia, cholera causes severe diarrhea and dehydration. Left untreated, it can be fatal within hours, even in previously healthy people. Thanks to what we learned from the 1854 epidemic in London, modern sewage and water treatment has virtually eliminated cholera in the more prosperous areas of the world.

Like smallpox, cholera is a disease that has been around since ancient times. In 1854, the prevailing view in London and throughout the world was that miasma caused cholera - that is, people contracted cholera through breathing in dirty air. This view was amplified by the prevailing attitude of the Victorian Age that cities were foul and unhealthy places to live. Even worse, the elite in the Victorian Age looked down upon the urban poor, believing that they deserved to get sick because of their decadent lifestyles and immoral character.

So why was 1854 a turning point? Johnson argues that year marked the convergence of two men from disparate backgrounds and temperaments who pooled their skills and resources.  John Snow is one half of the unlikely pair - a model of what it means to be innovative and openminded. A product of a humble background (the son of a laborer) and a socially awkward introvert, Snow became the most well-respected anesthesiologist of his day, even anesthetizing Queen Victoria during the birth of her eighth son. The cholera outbreak of 1848 piqued Snow’s curiosity and caused him to challenge the accepted orthodoxy of the medical community. What made Snow a rarity in his day is that he was open to other disciplines (e.g., statistics) and like Edward Jenner before him, he was determined to draw his conclusions from careful empirical observation of facts and objective reality.

The 1854 cholera outbreak gave Snow opportunity to test his theory that cholera was a contagious, waterborne disease. To prove his theory, he interviewed dozens of families and tested water samples from numerous households, ultimately concluding that the Broad Street water pump was responsible for spreading cholera through Soho. Snow captured his research in the form of maps that documented the relationship between foot traffic and the spread of the disease - research that would help launch the field of medical cartography necessary for disease surveillance - or what today we call contact tracing.

Henry Whitehead is the other key figure in Johnson’s book.  A gregarious and beloved priest living in Soho, Whitehead was initially opposed to Snow’s contagion theory of disease. After speaking with many Soho families about their experiences, Whitehead concluded that Snow was right and they joined forces. Deeply committed to the public good, Whitehead spent the rest of his life crusading on behalf of public health in London, always crediting Snow to the point that he kept a portrait of Snow in his study, as a reminder of the importance of deliberate study.

In sum, we believe that for enterprise risk management to grow as a field, it must be seen as dedicated to supporting human improvement and problem-solving in practicable ways. The story of Snow and Whitehead coming together is useful because they serve as symbolic reminders that risk management is both epistemological (Snow’s search for knowledge) and cultural (Whitehead’s pursuit of the common good). 

We believe the coronavirus crisis is a seminal event of this generation and will be considered so by future generations. Just as the world changed after the 1914 assassination of Archduke Ferdinand of Austria, the 1929 stock market crash, and the 1938 Munich Conference, much will change after this pandemic. We will explore this further in the next section - for now remember, that the COVID-19 pandemic’s greatest implication for ERM will be to refocus our efforts on how to better enhance the structures of togetherness in order to increase the probability and magnitude of good things happening (positive risk) while decreasing the probability and severity of bad things happening (negative risk).​


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    Authors

    Lori Siwik and Mark Siwik are the founders of SandRun Risk.  They apply the principles of vertical leadership and lean six sigma to the discipline of risk management.  From time to time they share their blog with guest authors who write about important risk management principles.

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