A definition of risk management: The identification, assessment and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor and control the probability or impact of unfortunate events or to maximize the realization of opportunities. Risk management's objective is to assure uncertainty does not deflect the endeavor from the business goals.
That is quite a definition, and it has me feeling good about what I do. I must really be important!
Yet when we immerse ourselves in professional development and networking at professional conferences like RIMS 2016, we seem to forget that risk management is about people. Are we really focusing our jobs and our success based on how we have touched people?
I am reminded of this on both personal and professional levels: My friend's colleague at Southern California Edison died recently when he was trying to restore power in Southern California to residents. He was a newbie with less than one year on the job. He left behind a wife and 3-year-old boy. He was only 26. When I saw my friend that week, he was visibly shaken even though he was a senior supervisor with years of experience. He had seen it before, but that doesn't mean he's used to it.
Recently, I dealt with a cost/benefit analysis in deciding to settle a lawsuit for our police department. Our officer shot an unarmed man in the back. The man was a convicted drug dealer and a known gang member. He will survive, but has some permanent damage. Our officer was unaware that he was not carrying a weapon. He did not have much time to react. It cost our taxpayers millions of dollars: That is what I focused on. Our officer was focused on protecting the public and making it home to his family that night. He felt he did what he needed to do being alone in a split-second situation, waiting for his backup.
Finally, while I was driving one of my children to school, for the first time in my life I was in auto accident. Our car was totaled, and thankfully my son and I only sustained minor injuries. After a car drove through a stop sign and hit us, I was terrified as I looked behind me and saw my son covered in glass, and I could see outside not through the broken window, but where the door used to be. I could have lost my son that day, and it profoundly affected me.
Employees get in accidents all the time. How does it affect them? In my organization, plenty of our employees risk their lives every day to bring a variety of services to our community. I can only applaud them. Some live in a world of risk that I can only see from afar and not completely understand.
Over the years I have begun to look at scenarios through my analytics eyeglasses. I am so focused on saving money, but does that save lives? Our employees are not numbers.
I often wonder how I can better prepare for the financial risk involved with flood, earthquakes, drought, El Niño rains and the devastation that follows. We do great things as risk managers, but our operations personnel only want to know that we care. They want to get home that night and see their families.
As risk managers we play an important role in the bottom line success of our organizations, but it is the human side that we can never forget. It is what makes our jobs even more important and rewarding.
Victor Parker is the director of risk management for the City of Los Angeles.
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