Airbag - steering-wheel continuum
In a Nutshell™: You only need airbags if you don’t steer straight.
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Risk Anatomy™
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The “airbag—steering-wheel continuum” is not a management consultancy thought experiment, though it should be. In fact, I made it up: it is a constructive management thought experiment. It asks:
Which is your “containment device” of choice? Prudence, or resilience to trauma?
Where, in other words, does your risk strategy sit on the spectrum between:
STEERING WHEEL: “I will conduct my affairs using market experts, whom I have empowered, to deal with sensible customers, whom I know well, in a prudent manner.”
and
AIRBAGS: “Sod it, I have big engine, bumpers and an ejector seat, I’m okay, so dammit, let’s bet the house on red and hope the roll cage works even if the ejector seat doesn’t.”
Should things not go according to plan, the likely outcome of the former is gradual, somewhat disappointing prosperity. The likely outcome of the latter, in the best case is you write off your car, but walk away with only a mild case of whiplash and a luxuriant regulatory enema to look forward to. The worst case is it turns out you were going faster than you thought when you collided with the wall, or — and this is quite a lot more likely — the wall was.
What kind of risk manager are you?
We can answer this one pretty quickly. If your first resort, as your car wheels unexpectedly lock up and you go into a sideways slide at a wall, is “hey, legal eagles, can I close out?”, you are an airbag sort of person.
Employers: if you hire risk managers who are airbag fans, you are an “airbag” sort of person.
If you get rid of experienced risk managers because their salaries are too high, and instead rely on some new tech kit and a few promising juniors, then you too are an “airbag” sort of person. If you model past data as an early warning system forcoming risks, you are an “airbag” sort of person.
Don’t be an “airbag” sort of person.
Contractual risks
Those contemplating outsourcing could profitably spend some time before setting with their battery of standard form contracts considering to which extent they address economic events — wherein the steering wheel, accelerator, brake and clutch are important — and to which extent they truck in formal legal risks — wherein the precise textual articulation is the key — and to which extent, by accident, design or the basic operation of workerr entropy, the first has elided into the second.
We have more thoughts about that here.
See also
References
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