Risk Management: Is ignorance really bliss?
* Disclaimer: No cats were harmed in the writing of this blog!
We have all heard of the proverb “ignorance is bliss” which means that if we are unaware of unpleasant facts or situations, then we cannot be troubled by the truth.
The theory of Schrödinger's Cat is a thought experiment, sometimes described as a paradox, devised by Austrian physicist Erwin Schrödinger in 1935 which can be applied to everyday situations, in terms of testing human assumption and risk awareness.
He stated that if you place a cat and something that could kill the cat, such as a poison, in a box and sealed it, you would not know if the cat was dead or alive until you opened the box. Therefore, until the box was opened you could deduce that the cat was, in a sense, both "dead and alive".
Although I am an avid reader, I first encountered this theory when watching a comedy sitcom and it got me thinking: there are a number of synergies between Schrödinger’s Cat and risk management process within businesses. The key theme is that businesses may occasionally ‘stick their head beneath the sand’ and fail to recognise blind spots (the closed box) and impacting factors (the poison). The second theme is that the element of risk can be both positive and negative (is the cat dead or alive?) and by taking an anticipative approach, there would be no doubt on the outcome.
The bottom line is that operating a business poses risks that are not always possible to avoid. By not having any real risk management methods or systems, the business, just like the cat, can be both dead and alive.
Companies cannot afford to be blissful in their ignorance. Too much is at stake – financially, reputationally, operationally, strategically…
Risk management processes and tools can help in capturing data, identifying key trends, uncovering areas of vulnerability and anticipating the likelihood of any undesirable events before they even happen can be a powerful advantage for any organisation. Combine this with the right mind frame of being proactive and using the available data to further improve.
In conclusion, it is only by opening the box that you will truly know the state of your organisation. Having an effective monitoring system in place can help make the right decisions to improve operational processes, reduce the likelihood of mistakes or undesirable events and building a sustainable business.
Speak to us to find out how our solutions can help improve your risk management process, and maintain a proactive approach to achieving operational excellence.
In short, keeping the cat alive and healthy.