by Michael Arbow
Partner, RSD Solutions Inc.
Health experts in the US have warned that unless a trend is broken, half the US population will be obese by 2030 (about 164 million people): their solution is to get governments to resolve the problem through increased education and taxation on fattening foods. This analysis and the resulting solution outline a few issues experienced in risk management; namely group/clone think and the need for a “man made” solution to natural phenomena. By broading their health research and consulting with economist, agriculturalist and global population experts they would have learnt that the trend can’t continue because the growth in world population and wealth, the transfer of food from mouths to fuel tanks and the falling rate of increases in food growing productivity (amount of food grown per hectare) are all leading to higher real food prices. As prices rise there will be demand destruction (Americans consume on average 12 times more food than they need to survive, Japan 7) and consumption of food will move to more historical levels. Thus the trend will not continue as it will be ended through natural economic conditions of supply and demand.
So you can see from this example how group think when applied to risk management can lead to a possible false conclusion which the groups then feels obliged to mitigate. So the question is: How does your risk team go about reducing the chance of group think – do they bring in other departments, seek guidance from the cloud, or bring in independent third party views?
For more on this article from the UK’s Daily Mail online service follow the link: http://tinyurl.com/3w43889
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