With the ongoing chaos in the British political system and the never ending public discourse about Brexit everything came to a head this week.
‘We need to meet to discuss Brexit Risk as soon as possible” came the message from Sarah, the Chair of the Risk Committee. So an urgent meeting was convened last Tuesday.
“How big is our Brexit risk?” was the opening question, put to me. As if this was the first time I had heard this question!
At the time of writing, we have no idea what the outcome of the Brexit looks like, or what the implications of no deal, an unknown deal or even remaining might be. Infact, this diary entry can probably be recycled in perpetuity because I can’t really see any firm or lasting conclusion to the issue.
I like to encourage the business to think about their risks in terms of events that could happen to them. Each event will have a cause, or causes and an impact, or impacts. I thought it would help if I explained it in terms of a bow-tie diagram.
I began to seriously regret doing this shortly after, as it raised a whole flurry of frowns and questions. So I explained a little more and painted them a picture.
I highlighted that,
“Many of the risk events which would occur within our business - and I’d wager most other businesses too - already existed in a world before Brexit was imagined. Brexit is mostly a causal factor on the left hand side of the risk bow-tie, making the existing risk event more or less likely to occur.”
“If a business relies on EU labour, then Brexit might influence the risk of a shortage of skilled labour.”
“If a business relies on imported goods from the EU, then Brexit with it’s potential changes to tariffs, might influence the risk of cost increases within the supply chain.”
“If a business operates globally and exchanges money, then Brexit might influence the risk relating to foreign exchange rates.”
“We should already be considering these within the business. Brexit merely makes them more or less likely to occur and more or less impactful. Moreover, Brexit does not even have to have happened for this to apply. The uncertainty around Brexit itself is already influencing probabilities and impacts.”
So when people ask about Brexit risk, my response is really that the impact of Brexit should be considered as a cause which may change the risk profile of existing documented risk assessments.
I think they understood but only time will tell.
Then later in the week I had a conversation with one of our Client Relationship Managers who arrived at my desk waving a questionnaire from one of our main clients...
“Question 6.4.11... How has your organisation rated the risk posed by Brexit?”
He was laughing before he finished his sentence because he must have seen the look on my face.
“The options for your answer are High, Medium or Low... shall I tell them we consider it to be Medium and that they need their risk guys to speak with you if they want more detail?”
“If those are my only options, then yes.”
Sometimes the pragmatist wins the battle over the idealist and I have learnt to live with that.
Who is the Secret Risk Manager?
The Secret Risk Manager is a senior risk professional working in the City. Over the years, they’ve seen a variety of risk practices - good, bad and ugly - across a variety of industries.
Like many risk professionals, the Secret Risk Manager’s CV has a large unspoken element. They are called upon to be in turns, therapist, coach, detective, mediator, behavioural scientist, parent, mind reader, futurologist, story-teller, philosopher and diplomat.
These articles do not pretend to constitute advice, but only to provide a frank and hopefully thought provoking look into the often frustrating world of those people who help organisations manage their risks. The subject matter is experience based, but fictional.
Any resemblance to actual incidents or persons living or dead is purely coincidental. But let’s face it, there’s not much new under the sun so you’ve probably seen it before.