President Obama began his speech at the UN General Assembly this week with this statement: “this is the best time in human history to be born, for you are more likely than ever before to be literate, to be healthy, and to be free to pursue your dreams.” Hearing that statement many are apt to shake their heads in violent disagreement (political inclinations and personal feelings about the President aside). Problems across the world, especially in the Middle East and Africa horrify us and the news media trumpets it out daily for our consumption. And if Political and Security Risk are your line of business, you could drown in the stream of bad news that fills your various intel streams everyday.
But here’s the truth, in the consulting and risk management business, if you are doing your job well you should be spending more time bringing an element of realism to people’s conceptions about geo-political risk and the potential impact to their people, operations, and assets than you do talking about how the sky is falling. As Hans and Ola Rosling of Gapminder discussed in a recent TED talk, most people – even the very well educated and informed among us – fall prey to the lopsided 24 hour news cycle that focuses on and even glorifies the worst of the worst in the world and rarely discusses all those things about the world, emerging markets or elsewhere, that are improving – which statistically – is almost everything.
Back when I used to do travel security presentations as a part of my job I had a chart that used State Department stats on American citizen deaths abroad by cause to illustrate the statistical level of risk from various threats while traveling or living abroad. The news would have you believe that you have an astronomically high risk of getting off a plane overseas and being caught up in a terror attack. When was the last time you saw a news report about American’s killed in a car accident overseas? I don’t have the numbers in front of me right now, but the most common cause of death and injury abroad for Americans, BY FAR, is car accidents. Next is drowning followed by suicide and homicide (concentrated in a few high risk countries where Americans tend to get involved in illegal activity). After that there are five or six other causes and at the very bottom of the list is terrorism which accounts for well below 1% of all American citizen deaths overseas every year. And when those deaths occur, they tend to be in places you might expect; Somalia, Iraq, Syria… That is not to diminish the horrific suffering and loss suffered by people in those places. But here, the point is that before I could jump into a discussion on keeping safe while traveling abroad, I first had to get everyone on the same page about what the REAL risk is. Then we could discuss the who, what, where, why, and how of keeping safe abroad.
And so it is with business risk as well. Would a terror attack have an extremely adverse impact on your personnel and business? Absolutely. And there are places in the world where this is one of your higher end risks – depending on your industry, visibility, and other factors. However, overall, your company is far more likely to be impacted by regulatory, political, or safety issues than it is by a VBIED. It doesn’t mean we shouldn’t be aware of the terror/ political violence risk and have crisis management plans in place and up to date, but we have to be careful not to get distracted by that bright shiny object when accounting for an organizations overall risk profile. In doing so we may fail to account for the subtler but bigger tripwires. Here in the US for example, we may be more likely to envision a terrorist plot to blow up a refinery as a key risk, but the small-time criminal who steals metals to sell for scrap is a more ubiquitous threat by far. The theft of certain metal parts from a refinery could cause machinery to malfunction in a way that could 1) could take the refinery offline for days or even weeks causing significant loss of revenue and in some cases a shortage of gasoline and other refined products to the local area 2) be very expensive to replace or repair or 3) cause an explosion or the release of toxic chemicals into the air (less likely, but much higher impact). So as your risk assessment and mitigation planning process goes, where do you put the bigger focus in terms of training and financial resources?
Likewise, when you decide to build a business in a developing country, what are your assumptions going in? That high levels of poverty necessitate heavy security around your operations and people? Or do you see it as an opportunity to become part of the economic solution, help grow the local economy, create jobs, and build local capacity? The right understanding of the risk environment and the right approach to mitigation and opportunity will make all the difference in your level of success. Rule of thumb: “Assume most things improve,” and ignore what’s headlining tonight’s cable news broadcast.