In this issue, we look at the complex ideas behind scenario analysis. Pundits claim it signals a new way forward for risk managers, building on traditional risk analysis methods. But how many organisations are actually using it?
Armageddon – the day you never thought would arrive. It is likely to evoke feelings of fear in all of us. The stress hormone cortisol rises rapidly, your heart beats faster, vision becomes blurry, hands sweat, mouth goes dry. Panic sets in. You thought this would never happen to you.
Now, imagine experiencing the same scenario, only this time after a dress rehearsal. You know the part you have to play, everyone knows theirs too and you are confident you can ad lib if necessary. In other words, you are a risk manager and you have implemented scenario planning as a key tool in your risk management toolkit.