Expect conditions of Non-marginal change to dominate risk headlines
As explored in the previous post, RiskRecon understands that decision making in hyper-complex market, policy, societal, and politico-economic operational environments, is seemingly a gargantuan task.
But, more importantly, it was warned that if risk identification is approached as a compliance-based tick-box exercise, to keep an audit committee ‘happy’, then that very behaviour is actually one of the biggest risks any organisation, or business, can face.
The reason for this is because assumptions of systemic, societal, market, or political-economic stability are challenged by manifold unpredictable disruptive forces and occurrences.
This means, assuming that there is a ‘more or less firm foundation’ (meaning, systemic status quo) from which to project, and extrapolate probable and improbable risks the system, your organisation, or business might encounter, on a given future trajectory, may just be that: a More or Less, yet, increasingly (un)stable foundation.
Global systemic fragility has been exhibited best in the havoc Covid-19 lockdowns caused in global supply chains.
This means that risk-opportunity analysis intended to inform strategy development, has to accept that economic ecosystems, and nations are stretched. In some instances the latter are stressed, increasingly brittle, or prone to outbreaks of civil unrest, feeding broader socio-systemic disequilibrium.
As will be explored in future editions of this series, this is exactly the point where the importance of the 4th dimension of risk- and markets, being interrelationships, becomes a critical distinguishing feature in the approach RiskRecon takes to supporting clients- and their strategic needs in complex operational environments.
RiskRecon understands that if there is to be a scale on which change can be weighed, the following two poles can be applied, being: Marginal versus Non-Marginal Change.
Change with ‘Marginal’ impact on the equilibrium/stability of the system, will occupy one end of the scale, while the other will weigh in as change, or events that have a non-marginal impact.
In the case of the Non-marginal, it means change that disturbs the systemic balance, and nudges it towards change that threatens and upsets systemic status quo/equilibrium. RiskRecon enables thinking that help to identify the sources of risk, or, Non-marginal change that may upset market conditions in unpredictable ways.
RiskRecon proposes that it is necessary to peel away a few deeper layers of the risk onion. In short, to enable decision makers, organisations, and businesses not to be outmanoeuvred by dynamic real-time unpredictable market reality.
The implication the above holds for RiskRecon is that our work is mainly to help decision-makers, organisations, and businesses to think clearly, and thrive, under conditions of non-marginal change.