Risk Management: Changes to Globalisation

Risk management is focused, by its very name, on what could go wrong. There are times, however, when things can go "right", and the risk is: not capitalising on the good that has happened. 

An example of failing to take an opportunity would be the Allied landings at Anzio, during World War (part) Two, where the caution of the Allied leader (and refusal to accept help from the Italian resistance) gave Axis forces enough time to shift their defences and surround the beachhead. There is thus a question over how many of the 12,000 dead and more than 60,000 wounded were actually necessary . . .

Not having a sovereign wealth fund (see here, here, here, here, here, and here) is another missed opportunity. 

Failing to act on warnings about the COVID-19 pandemic by adopting measures including those aimed at "flattening the curve" is a failure to take advantage of an early warning. (A recent article suggests my home state should have gone to Stage 4 lockdown with facemasks sooner, but possibly without the curfew.)

On top of that, many people have personal experience of missed opportunities. 

The problem of missing opportunities can be exacerbated when, after years of, for instance, abusive behaviour in a workplace, a new manager comes in, and opportunities are not taken out of suspicion - or, to choose a more intimate example, a good potential partner is distrusted because of past abusive relationships. 

Examples of missing opportunities (for a range of reasons, not only past abuse) abound - and an article this week has got me thinking about possibly missing opportunities internationally, as a result of some things becoming better as a result of the pandemic - specifically, globalisation. 

The article addressed the impact on globalisation of technological developments which have been highlighted by the pandemic. The main points of the article ("Deglobalisation or an Evolution of Globalisation?") are:

• "When seen through the prism of technology, globalisation seems to be evolving rather than ebbing. This raises the question of what policymakers can do to prepare themselves for this new phase of globalisation."
• the history of globalisation is that it has been driven by the search for cheaper labour, which benefits producers (by reducing costs), consumers (by reducing prices), and those nations which wind up with people employed (but at the - unacknowledged in the article - cost of those jobs which were effectively offshored - that group of people who are prominent amongst those currently support the USA's 45th [despotic] president, those people who get patronising, simplistic, dismissive and offensive comments about retraining that is inappropriate to the point of being idiotic); 
• open borders aid access to talent in other nations, but this is being resisted at the moment (including, I have to point out, for the very valid reason of trying to save people's lives from the pandemic); 
• that resistance to open borders is being "circumvented", the article states, by technology, which allows access to people wherever they are; 
• after the pandemic, laws on labour and technology matters should be updated to facilitate continued access to human resources wherever they are.
  

Moving away from digital forms of technology, whether highlighted by the pandemic or not, there are always changes afoot. Kodak failed to embrace the opportunities that consumers recognised in digital photography, went bankrupt in the USA in 2012, and now is making pharmaceuticals to capitalise on the pandemic.

(And, on the other hand, Nokia was initially a pulp mill - look how they have adapted.)

There was a story about a man in London in the late 1800s who said his company didn't need phones because they had message boys (and yes, it was all sexist at that time). 

(The rewards of capitalising on not being sexist - such as more workers, increased creativity, etc - is another example of the values of taking opportunities.)

The opportunities the pandemic has created include: 

• distant working (reduced expenditure on offices, improved mental health and productivity of workers, avoid the safety risks for workers of commuting); 
• possible rebuilding of an economy that is more people focused, and thus less rigid (business benefits include more flexibility for workers and thus improved mental health and productivity, ability to change market focus more quickly in response to changing demands, and possibly reduced office expenses); and 
• better use of advanced technology - and that does not include PCs, which have been passé for some time now: it means things like additive ("3D") printing, getting used to video conferencing and using it (and thus not sending money on work travel that isn't absolutely necessary - but telehealth is also an excellent example of this sort of principle), and improved shopping - such as click and collect, or vastly improved home delivery (and the Post Office is finally starting to capitalise on their competitive advantages in parcel delivery - well, here in Australia, at any rate).
  

If, as many people are calling for them to be, economies are rebuilt in a more  holistic,   inclusive,   people- and environment-focused   way, the economy will be different - it will, to state the obvious, be more people-, environment- and future-oriented, and that: 

• helps workers, which thus helps businesses that choose to allow it to do so - especially by getting away from distrustful factory floor attitudes towards supervision of workers (I'm glad I don't work at such a place, but I know others who are still stuck with that mediaeval style of "management") which have been out of place for around 70 years or more, and possibly always; 
• reduces short term and long term costs for businesses (renewables make better sense financially in many cases - certainly in the long term, and disinvesting from anything with an adverse environmental impact [which is more than only climate change] reduces the risk of future litigation); and 
• enables businesses to choose ethical, sustainable and socially licenced markets/activities, which enables business leaders to be better stewards of company resources, the world's resources, and more effective as long term leaders. 

But that all has to be seen, and the opportunity recognised, and taken. 

Change is coming - well, it's always coming, but more so, and bigger, as a result of the pandemic: who - businesses and nations - will be the Kodaks, who the Nokias, of this coming change? 

The losers - nations as well as businesses - will lose workers (all workers, not only the best), market share and markets, and eventually, in the case of businesses, existence or, in the case of governments, political power. 

Change is coming: Can you see it? Are you flexible, creative and courageous? If so, how will you adapt? 

Will you be a Kodak, or a Nokia?