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. Consequently, the future of ERM will be concerned with building enterprise-wide approaches to pursuing opportunities and managing threats. Such approaches require that ERM adapt to becoming a process that combines rationality with reverence for life as a means of obtaining total engagement to better manage risk.
The preceding section described the life of Dr. Albert Schweitzer and his concept of Reverence for Life - a principle that we believe needs to be the core purpose or the WHY of risk management. The last 200 years has been the story of humanity building better local models of self-sufficiency that are able to serve ever-increasing numbers of ordinary people and provide greater security from internal disorder and hostile foreign powers. In the last 75 years alone, these approaches have prevented a repeat of world wars and the probability that someone on the planet will die a violent death is now about 20% of what it was even 50 years ago.
Think about the history of the United States. While our nation has yet to reach its fullest potential and the expansion of what human life deserves reverence has been obstructed at every turn, our collective ability to manage uncertainty has improved. This country began by recognizing equality for a handful of white men of property and it then expanded to include poorer white men, then immigrants, then African-American men, and then women. More recently, this concept of reverence for life, in the political context, has expanded to include Asian immigrants, Latinos, and native Americans.
The 21st Century is another transition point - threats and opportunities have become essentially external to all organizations and countries as the world became more intertwined and interdependent. AIDS, Ebola, Mers, Sars, and now COVID-19 have taught us that pandemics will recur with some frequency. Likewise, all of humanity faces the challenges of climate change, information technology, and artificial intelligence. Just as the threats are global, so too are the opportunities. Geothermal breakthroughs that can tap the energy of the molten core beneath the planet’s surface may make clean electricity available to everyone in the world. Slaughtering cows and chickens for food will eventually go by the wayside as meat begins to be grown in labs from animal cells. Transportation will change with autonomous vehicles and electric cars that can go more than 300 miles on one charge and can charge from zero to full in 10 minutes.
Here’s the catch. While future developments in knowledge and science will usher in breakthroughs that result in overall greater global productivity, change, even good change, brings disruption and dislocation. What happens to people who work in fossil fuel industries, drive cars and trucks for a living, and work on animal ranches? How will these developments change our self-image, how we work, and the services and information we provide?
Let’s go back for a moment to the example of Paul O’Neill’s stewardship of Alcoa, a global manufacturer of aluminum, from 1987 to 2000. If you remember the story from our earlier discussion, O’Neill became CEO at a rocky time when profits were declining, the boardroom was unhappy, and 15,000 employees had gone on strike. It was a time of immense disruption and dislocation for the century-old company. Things were so bad that employees were dressing dummies as managers and burning them in effigy causing one observer to remark “Alcoa was not a happy family. It was more like the Manson family, but with the addition of molten metal." (C. Duhigg, The Power of Habit, 105 (Random House, 2012).
O’Neill’s prior life experience (born into a military family (son of an Army sergeant) and public university education) had instilled in him a deep reverence for all human life. To get Alcoa on the right track, he knew that his first step had to be to show that he cared about every employee. This was not “lip service” to O’Neill; “you actually had to care.” (R. Suskind, The Price of Loyalty, George W. Bush, the White House, and the Education of Paul O’Neill, 249 (Simon & Schuster, 2004).
Through the introduction of a new health and safety initiative designed to prevent zero injuries to Alcoa’s global workforce, O’Neill insisted that all incidents of injury be meticulously documented, communicated, and resolved. In so doing, O’Neill made it clear that low level factory workers were as valued as high level decision makers. He measured this goal not only in tracking health and safety records but whether every Alcoa employee could answer affirmatively to these three questions on a daily basis:
- I am treated with dignity and respect by those that I encounter every day, regardless of gender, race, title, religion, or level of education.
- I am given things I need (training, education, equipment, support, etc.) so I can make a contribution to this organization that brings meaning to my life.
- I am recognized every day for what I do by someone whose judgment I value.
By making reverence for life the centerpiece of Alcoa’s business culture, Alcoa’s injury rate (which was already an injury best (50% reduction every five years)) declined to 1.8 per 200,000 manhours, making it more likely that someone would get injured working as an accountant or software designer than handling molten metal at Alcoa. (Stewart, A New Way to Wake Up a Giant, Fortune (Oct. 22, 1990).
More importantly, O’Neill’s observable reverence for the life taught every Alcoa employee that he or she mattered and that he or she could contribute to something bigger than themselves. When workers spoke to O’Neill and other company leaders, “they didn’t want to talk about accidents. They wanted to talk about all these other great ideas” to improve the company. (C. Duhigg, The Power of Habit, 117 (Random House, 2012)).
O’Neill’s reverence for life would be on display again during his service as Secretary of Treasury under President George H. Bush. In June 2002, O’Neill spent ten days with the Irish rock star Bono visiting Ghana, South Africa, Uganda, and Ethiopia in an effort like Albert Schweitzer before him to help the African people obtain a higher standard of living.
Just as he did at Alcoa, O’Neill focused on “human value - the divine value of each blessed and beleaguered African.” (R. Suskind, The Price of Loyalty, 247 (Random House, 2004)). The trip so moved O’Neill that he would spend the rest of his life making time for projects that would deliver clean drinking water to Africa.
In short, total engagement - a key component to ERM is not achievable unless it is grounded in a reverence of life - one need only look at the example of Albert Schweitzer and Paul O’Neill to confirm the truth of this proposition.