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Risk Management Warning Flag 2 – Normalcy Bias
“It can’t happen here…”
Sinclair Lewis (1885 – 1951)
American Novelist and Playwright
Winner of the Nobel Prize in Literature (1930)
…but what if it could?
Failing to adequately prepare for adverse events places an organization at significant risk. Indeed, such shortcomings have contributed to the fall of nations, demise of companies, and severe injury and death of countless people. Yet despite all of the evidence, many organizations today remain unprepared to deal with catastrophic events.
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About the Author
Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.
Constructively critical business performance assessments often present executives and managers with a difficult to accept performance message. While intended to improve overall organizational performance, leaders may take these assessments as an affront to their authority or condemnation of their performance and some leaders may even retaliate against assessors. (See StrategyDriven Evaluation and Control Best Practice article, 
Organizations expend significant personnel and financial resources on well-performed business performance assessments and the implementation of follow-up performance improvement actions. To reap the appropriate return on their investment, executives and managers must carefully select the self assessments to be performed such that they directly support achievement of organizational goals and values while mitigating its most significant risks.
Not all decisions are made in the boardroom. Employees make decisions that affect the organization, its reputation, and financial well-being every day. It is important that these decisions be well aligned with the organization’s values and mission goals. Thus, employees should embody a conservative decision-making approach; being adverse to incurring risks that would make their actions unaligned with the organization’s direction.
Something is not right… performance seems okay but the organization is not moving forward, not learning, not developing, as it should. The spark of innovation, the passionate drive to excel is gone from the leadership team and workforce. Sales may be stagnate or declining. Or perhaps asset experience one too many failures to be considered normal.
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