7 Risk Assessment Blind Spots (and How to Beat Them)

You’ve all been there, driving along knowing you can predictably change lanes with ease, when suddenly a car shows up in your blind spot. You swerve back to your lane and everyone in your car is startled to attention, wondering what happened and knowing you messed up.

Or, you’re walking down the sidewalk, consumed by thoughts when you remember something back at the office. You stop suddenly in your tracks to turn around. You bump into an innocent victim and not only annoy them, but make them drop their phone on the concrete.

Both of these scenarios exhibit some common, everyday blind spots. Thankfully, the consequences of not being aware are usually minor. Every once in a while, though, a serious accident occurs because you weren’t aware enough of your surroundings to prevent it.

The same goes for assessing and viewing the risks of your business or organization. The consequences of blind spots are often minor, like having a handful of unhappy customers. Sometimes, the consequences are dire, like a stymied supply chain which ends up costing millions of dollars and negatively impacting thousands of workers.

To state the obvious, you don’t want this to happen. You want to have a 360° view around your business at all times so you can spot any oncoming risks. To help your vision, here is a list of seven common risk assessment blind spots that can creep up in even the best of times. Read through it and get to work, checking them off your list of perils to overcome.

1. Sticking to the Risk List

It’s all too easy to believe you’re prepared for everything when you have written a risk list and have completed the solutions to each bullet point. This is prudent, but oftentimes, unanticipated problems come up that go beyond your list and throw everything you thought you knew into a tailspin.

To beat this blind spot, be prepared for any sort of serious glitch, not just the glaringly obvious ones. Do this by asking plenty of “what if” questions, deciding on a set of automatic kill responses, implementing status metrics, and continually communicating with everyone on all sides of you.

2. Critiquing Only Your Own Risk

You’ve probably identified and mitigated many of your own risks, but have you looked into the risks of your suppliers, manufacturers, vendors, and retailers? Everything from elections and politics to discordant weather, ever-updating regulations, poor economic events, and the health of the labor market can cause a disruption that trickles (or flows) directly to you.

Close the gaps on those risks by:

• Ensuring the quality of each contract/contractor that you come in contact with.
• Diversify the location of your partners around the world.
• Verifying and monitoring their insurance coverage for lapses.
• Sharing information back and forth to foresee issues, solve problems, and reduce fallout.

3. Blaming People, Not Systems or Processes

Oftentimes, the quickest and simplest explanation for a problem is to fault a single person or department for their lack of oversight. This is not a good shortcut to take for correcting mistakes, though. Not only does blaming an individual not solve the actual issue, but it also highly discourages people from coming forward to escalate other issues that need to be addressed.

Instead, when circumstances go awry, take the time necessary to look deeply into how the systems or processes set in place have led to the undesirable outcome. You’re sure to find many small-scale errors along the way rather than one cataclysmic error.

4. Discouraging Conflict

Tension is inevitable. It’s simply a byproduct of differing minds and experiences coming together and grappling for recognition. Which policies and strategies take priority? What are appropriate limits? Is there a reachable balance between safety and budgets? Everyone in the ring has a valid argument to be debated. Too often these arguments are shut down in order to avoid conflict and speed things up. Bad idea. Listening to devil’s advocates is extremely important if you’re going to find the best route to take.

To encourage functional conflict while remaining productive:

• Keep the discussions manageable in number and type. Avoid inviting observers and redundant representatives.
• Facilitate the hearing of agreements/disagreements from those who are keeping quiet, but who have knowledge of and a stake in the topic. Engage diverse points of view to enrich the dialogue.
• Don’t rehash and catalog all the known risks. Just focus on the few that really matter or haven’t already been considered.
• Avoid structuring data to fit a preconceived goal. Utilize all scientific data and don’t ignore available facts, no matter what points they demonstrate.
• Consider the consequences of a wrong decision, even incorporating extreme scenarios. Are they acceptable? Are there any contingency plans that can mitigate fallout?

5. Forgetting That Things Change

Past successes are no guarantee of a successful future. Probabilities, forecasts, predictions—they all trust certain “truths” to perform properly. Unfortunately, life is as unpredictable as … well, life. Threats to focus on are high impact, high velocity, or high persistence (or any mix of the three), and can be a result of natural disasters, technological glitches, civilian protests, legal claims, or any number of other things.

In other words, don’t draw false security and refuse to assess significant threats that throw off the numbers. Overcome this tendency by opening up your view of the future and what it can present. Visualize a different future, one that would change everything. We’ve all lived enough life to know the world can change in the blink of an eye. Don’t ignore that fact just to make your desirable outcome seem more likely.

6. Stopping the Questions

In The Demon-Haunted World: Science as a Candle, author Carl Sagan says:

There are naive questions, tedious questions, ill-phrased questions, questions put after inadequate self-criticism. But every question is a cry to understand the world. There is no such thing as a dumb question.

The same applies in the risk assessment world where questions may also seem irrelevant, out of context, or already asked and answered.

So keep the questions coming, both from yourself and from others. Ask things such as:

• Do we understand the underlying assumptions about…?
• Have we made sufficient use of…?
• Are we satisfied with…?

7. Being Satisfied With a Normalization of Deviance

Being “near compliant” automatically puts your organization at risk. This is a surprisingly easy blind spot to fall into because company policies and practices are often convoluted and poorly communicated. As risky as one non-compliant act is, it’s even more risky when the act becomes normalized (it happens more often than you think).

If you’re already experiencing a normalization of deviance, start working immediately to resolve it. At all times, remain—and demand your employees, suppliers, vendors, etc. be—compliant with all laws, rules, regulations, standards, policies, and practices. Enforcing them helps you detect violations and avoid fines, lawsuits, and disgrace. However, don’t just rely on new-found courageous enforcement. A continual culture of compliance is successfully achieved through using compliance software along with a healthy mix of risk assessments, inspections, and ongoing trainings all directed from the top down.

A 360° View

When you think about the domino effect that can come of a run-in with any of these seven risky blind spots, the significance of avoiding them becomes palpable. On the flip side, having a 360° view into risk assessment allows for:

• Deep insights
• Optimized logistics
• Mitigated risks
• Improved efficiencies
• Seamless integrations
• Satisfied customers

To accomplish all of this, you need buy-in from the top and cooperation on all fronts to alleviate the blind spots and cushion unplanned bumps. Only then will you be able to rest, assured that your business can handle anything. Just don’t rest for too long because, as the first half of 2020 has proven, life is unpredictable and may just throw you a pandemic/global economic downturn when you least expect it.