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How Do You Prevent Volcano-Sized Risks? You Don't.

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#Risk Management
What lesson can we learn from the gigantic volcano eruption that recently blocked European airtraffic? That we cannot anticipate all risks and that, besides prevention, managers must learn to propose proper responses in case of a major crisis.

As the adage says: “An ounce of prevention is worth a pound of cure”.

Bruce Arntzen (MIT Center for Transportation & Logistics) illustrates this famous adage in the Harvard Business Review. He explains that traditionally, companies’ managers tend to pay a great deal of attention on the prevention-side of a crisis instead of the response-side…which is essential!
Most enterprises have risks prevention programs but very few implement recovery programs, above all for destructive and least-predictable risks (like natural disasters). Perhaps it is because these risks are less likely to happen? Bruce Arntzen tends to think so and provides 2 key points for executives:

1. Executives need to address both prevention and response.

2. They need to keep the strategic, end-to-end picture of their supply chains in mind at all times.

To summarize, having a backup plan is not an option for companies’ is a must!

{{LNK|Read the entire article on HBR| }} By Bruce Arntzen

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