What is your Dreamworld?
Over the last few weeks we have witnessed a tragic event unfold in one of our countries most popular tourist attractions on the Gold Coast.
The event has proved devastating for many people, none more so than the immediate friends and family of those affected by the tragedy.
People have been quick to level numerous accusations at the business operators and the resultant media focus understandably has been intense.
Those who were otherwise anonymous are suddenly expected to have answers to explain how such a tragic accident could occur. Many people from the CEO right through to the maintenance and operations staff have been subjected to considerable scrutiny. Everyone is looking for answers.
There are numerous risks that business can be exposed to which can potentially lead to serious injury or death of staff and/or customers. These may be safety or security related, involve fire and natural disasters, even data hacking has led to tragic outcomes.
When we undertake security risk assessments, one of the many questions we ask is this: fire aside, what is the worst thing that could happen to the business? This always prompts much discussion and the responses will vary depending on the type of business we are working with.
What is the worst thing that could happen to the business?
Risk comes in many forms and is addressed in the first instance by identifying the type of risk, ranking it for priority and then treating it.
One of the higher profile risks right now for business is associated with the integrity of data and information. IT and cyber security are growing requirements, particularly for big business because of the damage that can be caused to an organisation through the loss of sensitive information.
For physical security advisers and property managers, the risks we deal with are vastly different. We are responsible for keeping properties safe that at any given time can house several thousand people. Not only do we need to manage security, we also have to be experts in chemical storage, plant and equipment maintenance, traffic management and a range of other services.
In Australia, a safe and secure work place is not only expected, it is legislated and enforced by our state governments.
POTENTIAL RISK RAMIFICATIONS
Consider the possible ramifications of a serious incident occurring on a property and what the exposure to the property managers could be. These could include:
- Insurance claims (and subsequent impact on premiums)
- Police and/or Workcover investigations
- Reputational damage
- Embarrassment
- Loss of earnings
- Business disruptions
- Legal costs
- Employment impact
Serious incidents are a big deal in this country. The natural reaction is to find someone to blame and to ensure they are appropriately penalised for their errors.
The question is, how far do we go in evaluating risk, particularly from a security risk perspective?
While the chances of serious security incidents occurring are mostly unlikely, it should not preclude the risk from being carefully considered anyway.
RISK TEST
This is the process we would suggest taking to determine the impact of a major event occurring in your business:
- Take a pen and write down the three worst events that could occur on your property
- Against each of those three points, then write down the impact it would have to the business should the event occur
- Lastly, try and add a dollar value to it. Is it a $1M event? A $5M event? A $50m event?
Some costs such as reputational damage will be hard to measure. For public companies where the share price can be heavily influenced by local sentiment, the cost could easily be in the tens of millions of dollars.
In the case of Ardent Leisure, the owners of Dreamworld, approx 30% has been stripped from their share price since the incident occurred. In the long-term, the financial cost to the business could be even more significant, depending on how quickly confidence in their operations is restored. Some analysts predict that Dreamworld may never fully recover. Much of that is likely to depend on the outcome of the ongoing investigations.
Once you have listed your potential incidents, then review the business to see if it is positioned to cope with the event should it occur. The dollar value will quickly determine which risk needs to be considered further.
Reducing the likelihood of remote but potentially catastrophic incidents occurring is just one step in the process. Business continuity planning and disaster recovery is just as important because they will often determine how quickly normal operations can resume.
Once you have listed your potential incidents, then review the business to see if it is positioned to cope with the event should it occur.
In light of what has occurred at Dreamworld, resumption of normal operations may be outside of the control of the property managers. Until the property is no longer treated as a crime scene, normal business operations have no hope of resuming. This is something that would be impossible to forecast ahead of time.
All commercial properties have fire and emergency management plans in place, because it is legislated in some instances and for compliance in others. While incidents of similar severity are mostly unlikely, it doesn’t mean they should not be considered.
What would be your version of a Dreamworld event and have you planned for it?
