Risk e-Views Vol 38 February 2014 – Risk Leadership: Why History Keeps Repeating Itself

Since Darwin’s Origin of the Species, we have recognised how nature adapts to survive. Modern humankind continues to adapt to survive while following these two innate risk management principles:

•    If it hurts us we learn and take action in proportion to the degree of pain.

•    The next time we face the same pain we are better prepared and we go back for more and either avoid the pain or at least find a way of working to a new pain threshold.

Why history keeps repeating itself is simple really. It is the passage of time. The more frequent the pain, the faster we learn. The less frequent the pain, the slower we learn. In corporate life the pain that lives strongest in the corporate memory is the pain we work hard to avoid. Take the process Disney follows to avoid being sued for breach of Intellectual Property.

A colleague told me he wrote a book and sent it to Disney indicating it could be a great movie. They sent it back unopened with a letter saying they did not open it and won’t read it – full stop. Early on, Disney was sued for breach of copyright and this one sticks very strongly in the corporate memory.

The point is, history does repeat itself because the really big lessons have very long periods of time between events and we forget. 

A really great Enterprise Risk Management program recognises all risks need to be managed all of the time in proportion to the risk they pose to the organisation. 

Does yours?