Introduction
Enterprise Risk Management is the process of determining what an organization’s operational risks are and the appetite that upper level management has for those risks. The idea is that by identifying the risks ahead of time, the risks can be avoided or mitigated.
Like all such procedures, the goal is worthy. However, there are weaknesses. One of the little recognized problems is how people react under stress.
Enterprise Risk includes the impact assessment of Black Swan events. These are adverse occurrences which cause substantive damage to the organization. These events occur infrequently and are mostly unpredictable. This makes them difficult to train for. It also means that individual reaction to the stressful event can play a major role in how well the event is weathered.
Physical Reaction to Stress
While there are numerous psychological terms for how people react under stress, particularly during catastrophic events which may be life threatening, the basic reactions can be summarized as fight, freeze or flee. Except in combat, the fight action is when individuals perform the duties necessary to get through the event correctly. Under the other two states individuals either freeze, thus fail to perform their duties quickly enough, or they run away.
If one reads about the way people acted during 911 in the twin towers, all three states are seen. In general, the individuals who survived were in companies where there was regular evacuation drills. But training is not always sufficient. Sometimes it can misdirect, be incomplete, or the physical reactions to the stress can preempt the training. Let me provide two examples.
The first is personal. As an Artillery Officer in Vietnam, I was assigned as a Forward Observer to a Vietnamese Battalion during a joint operation. When contact occurred, I started cussing a mile a minute. At first it was because my radio operator had stopped to tie his boots. Therefore, my radio was not immediately available. Consequently, I grabbed one of the Vietnamese radios and initiated the artillery fire mission. When my back pack got hung up in the jungle vines as I moved, as I had been trained, to the front where the fire fight was occurring, another vocal explosion occurred. The expletives continued when a bullet hit the tree I was standing next to and put bark dust in my left eye. At this point, even though I was under fire, I could not see all the lead elements, and the fire mission was given back to those in direct radio contact with the lead elements. I learned two things from this. First, adrenalin surges can cause unpredictable reactions. Second, my forward observer training focused on physically going to the point of contact. In the jungle, visibility is limited. Thus, radio contact, not actual presence, is more appropriate.
The second example comes from a conversation with a friend, who was the fire arms instructor for a local police department. In addition to the standard qualification procedures, my friend tried to provide more realistic training. This included practice firing lying down using a curb for cover, lighting fire crackers off during firing exercises and the use of paint ball guns. A continual emphasis during training was making sure that a good site picture was obtained before pulling the trigger. However, an after action report of officer responses to a store robbery, where shots were exchanged, determined that in many cases numerous bullet holes were found several feet in front of the officers. Thus, the officers were pulling the trigger shortly after drawing their weapon, but before they had a site picture. Even though these officers are professionals, regularly in stressful situations, their physical response to this life threatening event over road their training.
The physical reaction of individuals under stress, particularly life threatening situations, needs to be taken into account. It is unpredictable. Further, this is not human error. It is a basic survival response common to all animals, of which we human are a part.
Operationally Mitigating Reactions to Stress
When accessing the risks associated with a Black Swan, or other event which might cause high levels of stress, life threatening or not, be conscious of several things. First, this response is real. Second, it can be mitigated in several ways. The first and easiest is continual training. The attempt is to condition the individuals to react in the situationally correct manner. In essence, the training creates muscle memory, where by, the stimulus of the event, causes an instantaneous and correct response. A review of the training records and coverage is the best starting point.
The second is to, where applicable, have technological safe guards. When assessing the adequacy of the technological safe guards, ask three key questions. Can someone under extreme stress easily activate it? Is it mistake proof? Lastly, are there cut outs which will prevent or mitigate a cascading effect, if someone acts incorrectly?
Bio:
James Kline is a Senior Member of ASQ, a Six Sigma Green Belt, a Manager of Quality/Organizational Excellence and a Certified Enterprise Risk Manager. He has over ten year’s supervisory and managerial experience. He has consulted on economic, quality and workforce development issues for the City of Corvallis, Benton County Oregon, the State of Oregon and the League of Oregon Cities. He has also published numerous articles related to quality in government and risk analysis.