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Risk Management vs. Crisis Management

Risk Management vs. Crisis Management

May, 02, 2014
by Rod Farrar
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Well welcome, in this session I want to talk something that’s, I guess it might sound a little bit flippant for you, but the difference between risk management and crisis management. See crisis management is a lot more fun than risk management. Let’s face it, your adrenalins up, you’ve got more resources to work with, you’ve got greater funding, there’s a lot more attention on you, the spot light is on you to solve this particular crisis. And a lot of people have received awards and honours and commendations within their organisation for solving crises.

So it is a hell of a lot more fun than risk management and I’m sure there are those in the organisation that thrive on crises. But if we take a little bit of a look at it and ask the question, “how many of those crises were avoidable?” As much fun as it is to deal with them, I can tell you it’s a hell of a lot more fun and a lot better for the organisation that they don’t happen in the first place. See risk management is proactive it’s looking out; It’s looking out at the things that can go wrong and it’s trying to stop those things from happening in the first place.

Crisis management, well you know, that’s happening in the here and now and you are painted into a corner. You have very, very limited options available to you and often it can cost 10 or more times the crisis management than it can the risk management. And that makes no sense to me. Yes it is a lot more fun, but ultimately for an organisation if you are in constant crisis mode how in goodness name are you doing business as usual, let alone moving forward to meet your strategic objectives. You are mired in the here and now and you cannot grow as an organisation. So for all of you out there who enjoy the crisis, that’s fantastic, but I would rather be in an organisation where those crises are kept to a minimum and I’m meeting my objectives and I’m satisfying my stakeholder community.

That’s all I’ve got for today, well for this session, let’s be careful out there.

Written by Rod Farrar

Rod is an accomplished risk consultant with extensive experience in the delivery of professional consultancy services to government, corporate and not-for-profit sectors. Rod takes every opportunity available to ensure his risk management knowledge remains at the ‘cutting edge’ of the discipline. Rod’s Risk Management expertise is highly sought after as is the insight he provides in his risk management training and workshop facilitation. Rod was recognised by the Risk Management Institution of Australia as the 2016 Risk Consultant of the Year and one of the first five Certified Chief Risk Officers in Australasia.