Updated: Aug 30, 2018
Written by Neil Allan & Gareth Byatt
In this interconnected and increasingly digitised world, many (indeed, perhaps most) risks and uncertainties that we contend with cannot be evaluated and managed in isolation.
Common features of interconnected risks and uncertainties include multiple characteristics, causes and consequences. Such interconnected risks can spiral and morph in unpredictable ways and a collection of risks, when combined together, can result in new risks or outcomes.
In one high profile example of such interconnected risk, thousands of suppliers are reportedly owed money following the recent collapse of the UK’s second-largest construction business, Carillion. Some suppliers are even predicted to collapse themselves as a direct result of not being paid for work they have already performed.
Understanding and mapping the interconnectivity of the risks we face doesn’t need to be complicated. It can be done in three simple steps: firstly, understand the risk interconnectivity through systems thinking and network analysis. Second, put good resilience practices in place. Third, maintain awareness of threats and act upon them early.