How to take advantage of Low Cost Risk Mitigation

Many people have a problem evaluating the cost of the impact of a risk because they are mired in the probability of it occurring. Small or low cost preparations can be ignored if the possible impact of the event is downplayed or dismissed.

You might want to use the following article to help people overcome this issue.

Hurricane Sandy

According to a November 17th, 2012 Toronto Sun article, “New Jersey Transit’s struggle to recover from Superstorm Sandy is being compounded by a pre-storm decision to park much of its equipment in two rail yards that forecasters predicted would flood, a move that resulted in damage to one-third of its locomotives and a quarter of its passenger cars.”

This is another good example of the “It won’t happen to us” syndrome. Despite being advised of the potential for flooding, the railway authority parked their commuter trains in an area susceptible to flooding. The consequences included millions of dollars in damage and many trains that cannot be put back into service pending extensive repairs and resulting in commuter delays and overcrowding. Additionally many people will opt to drive into NYC thereby increasing road traffic and fuel consumption.

“There was no reason for anybody to believe that the flooding was going to be anything close to what we experienced,” James Weinstein, NJ Transit’s executive director said.

Even now, those involved in the decision making at New Jersey Transit are amazed at the impact of Sandy. They are still caught up in the probability trap. One way in which to escape the trap and to recognize the value of mitigation measures is to separate the evaluation of probability from the evaluation of impact of the risk when conducting your assessment. Ensure that those who have assessed the impact also look for mitigation measures. If this is done during the same workshop as the Business Impact Analysis, the team can easily move from evaluating impact to understanding the effects of a disruption of service.

 

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