Smart companies keep a close eye on their exposure to risk. Banks are required to assess the risks associated with all functional areas of the company (credit, financial, product, compliance, IT, market, etc.). Not a bad idea for the rest of us…
It’s a big job, but a recent report suggests a very simple, yet effective process any company could adopt: review “near misses”. An article from wired.com, citing a NASA finding, proposes that looking back at accidents or problems that occurred is not as effective in mitigating future problems as is the study of near misses. “A more effective way to curtail disasters [risk] is to get better at spotting the near miss.”
I like the concept. It’s simple, easy to adopt, and imposes a proactive environment.
Do you have a system of reporting near misses? My take is that forewarned is forearmed! An employee report of how something very nearly went wrong would provide management with an awareness of what may be systemic or reputational risk.
