Monday, July 8, 2013


Always wear
     Clean underwear


If a risk management practitioner needs a motto over his or her office door to observe on the practitioner’s way out, it should be:

Always wear clean underwear

Now at first blush you may think this scrivener has lost it. While that is generally debatable, I assure you in this instance I am fully in charge of all my facilities.

What is it we – risk management practitioners – do? Bottom line?

We anticipate and plan for the unexpected.

No, I’m not talking about swans of any hue; I don’t believe in black swans as an event that could not be predicted.

I’m talking about the unexpected event; the proverbial car going out of control and striking someone, the ride in the ambulance to the hospital where the injured person is stripped of all clothing, including unmentionables, and clothed in a no couture open-back gown.

    In polite society no one would mention that even if the victim of such an accident started the day with clean skivvies, they probably would not be that way when removed at the hospital. Still, “it’s the thought that counts” in the admonishment.

Looking for threats

Fact: You can’t prepare for a threat if you don’t anticipate the threat’s probability.

Where can threats be found? Let’s start with


    Competition: What has the competition done – new products, pricing, marketing

    Environment: What are the environmental threats? Tsunamis in the desert, snow storm in south Florida? What about neighbors. What do the neighbors do/make/sell? How if the neighbor perceived by the public, its employees?

    Government: Laws, regulations, taxation, liabilities.

    Labor: Work actions, availability of casual staff and contractors; tools required and available, education and training, work authorizations if multi-national.

    Standards: Local, industry, international



    Alternate vendors: If the primary vendor for any particular product fails, is there an alternate source; are arrangements in place to buy from that vendor?

    Financial: Are lenders, creditors financially strong; will they be there when needed?

    Food: Is there sufficient food to sustain staff if a shelter-in-place situation presents itself? Consider diabetics and other special diet requirements; poll the people.

    Insurance: Does the business have enough of the correct type insurance? Too much? Have the policies been reviewed by an independent expert? Does management understand the policies’ requirements (e.g., for documentation).

    Transportation: Getting raw materials from vendors; getting product or services to customers; access to the job site, marketing site.

    Vendors' vendors: Consider the vendor’s risk management plan. Is there a plan? Has the customer vetted at least a “sanitized” plan?


    Communications: Secure? Multiple demarcation points? Multiple vendors? Multiple methods (landline, cell, two-way radio, courier, T-n for Internet connectivity)?

    IT: Data protected, tested, and accessible within time limitations? Low MTBF parts on hand, repair tools and documentation available? (Also see Labor under the History heading.)


    Awareness: Management needs to be aware of risk management; what it can do for the organization; how, unlike insurance, it can bring financial, marketing, and PR (among other) benefits to the organization. Management must realize risk management must be an on-going program. not a one-time project,

    Participation in risk management processes: Understanding the role of management in all phases of risk management and a willingness to perform tasks for which they are best suited by position and personality.

    Policies and procedures: Signing off on risk management-related policies and procedures that impact all personnel at all times.

    Support for risk management: Top down flag-waving support by senior management is required for a successful risk management program.

“Always wear clean underwear” may seem a silly, frivolous remark, but put into a risk management perspective, it takes on new meaning and makes a great deal of sense.

If I wrote it, you may quote it.

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