By: Mike Horrocks
In 1950 Alice Stewart, a British medical professor, embarked on a study to identify what was causing so many cases of cancer in children. Her broad study covered many aspects of the lives of both child and mother, and the final result was that a large spike in the number of children struck with cancer came from mothers that were x-rayed during pregnancy. The data was clear and statistically beyond reproach and yet for nearly 25 more years, the practice of using x-rays during pregnancy continued.
Why didn’t doctors stop using x-rays? They clearly thought the benefits outweighed the risk and they also had a hard time accepting Dr. Stewart’s study. So how, did Dr. Stewart gain more acceptance of the study – she had a colleague, George Kneale, whose sole job was to disprove her study. Only by challenging her theories, could she gain the confidence to prove them right. I believe that theory of challenging the outcome carries over to the practice of risk management as well, as we look to avoid or exploit the next risk around the corner.
So how can we as risk managers find the next trends in risk management? I don’t pretend to have all the answers, but here are some great ideas.
- Analyze your analysis. Are you drawing conclusions off of what would be obvious data sources or a rather simplified hypothesis? If you are, you can bet your competitors are too. Look for data, tools and trends that can enrich your analysis. In a recent discussion with a lending institution that has a relationship with a logistics firm, they said that the insights they get from the logistical experts has been spot-on in terms of regional business indicators and lending risks.
- Stop thinking about the next 90 days and start thinking about the next 9 quarters. Don’t get me wrong, the next 90 days are vital, but what is coming in the next 2+ years is critical.
- Expand the discussion around risk with a holistic risk team. Seek out people with different backgrounds, different ways of thinking and different experiences as a part of your risk management team. The broader the coverage of disciplines the more likely opportunities will be uncovered.
Taking these steps may introduce some interesting discussions, even to the point of conflict in some meetings. However, when we look back at Dr. Stewart and Mr. Kneale, their conflicts brought great results and allowed for some of the best thinking at the time. So go ahead, open yourself and your organization to a little conflict and let’s discover the best thinking in risk management.