Art Hutchinson returns to the theme of unpredictability, this time in the context of terrorism:
Terrorism is fundamentally not a forecastable thing. That’s especially true during a period of innovation and expansion in that sad, sick “industry”. The fact that the peak death number changed so suddenly makes a conservative rational calculation based on past history just as tenuous as any radical emotional guess based on fear. Given that the trend is clearly up however, and that the last jump was by 10X [from the 300+ killed in typical 1980s terrorist attacks such as Lockerbie, to the 3000+ who died on September 11], it is only prudent that we err to the side of assuming high and being wrong than assuming low and waving bye-bye to New York or Los Angeles.
The larger point? What’s tough about predicting terrorism is also tough about predicting discontinuous change in business. Applying the same forecasting methodology to discontinuous possible ‘left-field’ problems as to well-understood, clearly bounded problems with deep actuarial data-sets is like trying to eat soup with a knife. A tool that’s extremely precise and powerful for some jobs is utterly misguided for that one.
Emphasis Art’s, but it might just as well be ours. Once again — as in his commentary on Avian Flu , which we noted earlier — he opens a window into one of the advantages of Enterprise Resilience Management. Enterprise Resilience Management recognizes the value of planning — planning is necessary to identify assets, anticipate threats in general terms, and determine the rules for response. But the plans that are generated operate at a high level — one that remains open to multiple contingencies. We determine, for example, that a nuclear reactor is critical and complex, and thus likely to be vulnerable. But the rules for defending it are flexible, and apply in any number of situations — ranging from deliberate attack to industrial accident. The use of contingent, dynamic rule sets means that we do not have to over-plan. And the flexibility of the system means that we are ready for the unexpected.
Enterprise Resilience Management is designed for a world of known assets and unanticipated risks. The resulting solution meets the terms of unpredictable situations — whether these are attacks on critical assets, or supply chain disruptions, or unanticipated opportunities in the normal course of doing business. Organizational reality is a mix of the predictable and the unpredictable. The Enterprise Resilience Management Solution is built with that reality in mind.
Art’s focus is on long-range strategic planning and forecasting, not on operations. Nevertheless, his observations apply to operational concerns. For that reason — and because his commentary is very much worth reading in its own terms — we’ll continue to watch his space.