Jessica joined RWA in 2018, having graduated with a First Class Honours degree in Film Studies. Her role as a content designer involves developing new and engaging e-learning modules as well as assisting in the creation of articles for Insight.
The pandemic has left even the most prepared organisations struggling to cope with operational and financial difficulties they never contemplated, let alone planned or practiced for. As parts of the UK prepares to go back into lockdown, it is becoming more apparent that traditional methods of risk management are failing to deal with the ever-changing situation.
Despite warning signs, many firms might have been aware that their risk management processes were not perfect, but would reasoned that the issues were negligible, making it easier just to live with them and “cross that bridge when they got to it”. With the arrival of COVID-19, those seemingly insignificant issues suddenly became glaring operational weaknesses, severe enough to inhibit response and inflict serious damage.
A few years ago, back in my uni days, I was introduced to the works of Powell and Pressburger as part of my introduction to British cinema. Among these films, a particular scene from A Matter of Life and Death (1946) has resonated with me even now.
In the scene, the film’s protagonist argues his case in front a celestial court for having a second chance. The prosecutor rejects the argument, reciting the old maxim “For the Want of a Nail”. For those not familiar, “For the Want of a Nail” is a 13th century German proverb, which carries a stark reminder that seemingly insignificant acts or omissions can have unforeseen consequences:
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
Such a chain of events only becomes visible in hindsight. By overlooking or choosing to ignore something as it appears, it will eventually grow until it is no longer manageable. The same can also be said in business. Most firms are well aware of mitigating risks which may prevent their business from operating.
Back in 2019, the FCA published consultation papers which highlight how businesses should be taking steps to ensure they remain resilient in the event of a crisis. However, as is the case with hindsight, the papers have shone a spotlight on how few businesses have even considered how they would manage a crisis.
Taking Operational Resilience seriously is no small undertaking for firms. It requires firms to:
For solo regulated firms, focus of any Operational Resilience work should be on business services. However, dual regulated firms are also required to identify risks to their finances. Finally, the regulator has also made clear that outsourcing of services does not diminish their responsibilities.
The main goal is to create a ‘muscle memory’ response so that firms become used to these events happening and to recognise procedures so that they can respond with confidence should a real crisis ever occur.
Even if Operational Resilience seems like another task on the on the ever-increasing ‘to-do’ list, you cannot always predict the future, there are always surprises waiting around the corner. Having a clear plan in place for these surprises is better to help weather the worst impacts of a crisis than to go in with nothing at all and hoping for the best.
After all, life is not a movie, you may not be able to argue your second chance.
For more information about Operational Resilience and Business Continuity Planning, please contact your RWA Business Manager.
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