Risk assessment is the flip side of what will make it worthwhile, in other words, for what is most important to us, when situations get difficult or something bad happens – a crisis arises, or circumstances change – how much are we willing to suffer?

The question is not about what we hope doesn’t happen (although truly no one wants to experience misfortune or unpleasant circumstances).

The question is considering the possibility of scenarios occurring which, whether we like it or not, we must endure.

The question goes on to contemplate what can be done to alleviate our suffering, and then… how much we are willing to invest in preventing or moderating the suffering.

At one time I was involved in something called crisis management, which is how well-run companies prepare for, resource, plan and practice for a range of negative events that could threaten either the company’s image, on-going operations, or strategy and policies.

This is not a matter of buying some insurance and hoping for the best. The process is sophisticated, the range of expertise called upon is broad, and the integration of plans … the primary lesson on addressing risk is that there are far more possiblities to protect an individual, a project or goal, a family, a small company or large company through a range of changing conditions, than most people dream of.

The real hurdle to overcome?

I hope you can guess by now… it’s the conventions and cultural expectations that have been pounded into us.

Basically, we have been educated out of common sense, and made to fear thinking about unpleasant scenarios, but most importantly, we have been programmed to keep our thinking INSIDE cultural parameters (“the box”).

Today, “protecting one’s family” means giving money to some company in the hopes that they will do something when a certain bad thing happens.
We have been taught to assume that the police or the military or the Red Cross will be there for us when something awful happens – a natural disaster, accident, etc. and so we go our merry way and think nothing more about it.

The Mormon Church has a different view of “insurance” and “protecting one’s family”, called “provident living”.

“Our Heavenly Father created this beautiful earth, with all its abundance, for our benefit and use. His purpose is to provide for our needs as we walk in faith and obedience.
He has lovingly commanded us to ‘prepare every needful thing’ (see D&C 109:8) so that, should adversity come, we may care for ourselves and our neighbors, and support bishops as they care for others.”
“We encourage members worldwide to prepare for adversity in life by having a basic supply of food and water and some money in savings. We ask that you be wise, and do not go to extremes. With careful planning, you can, over time, establish a home storage supply and a financial reserve.”

‘All Is Safely Gathered In’, The Church of Jesus Christ of Latter Day Saints

That sounds, to me, like risk management… and prudence. Sensible is sensible, regardless of the source.

Some Mormons today incorporate the practice of maintaining a rotating food stock system in their home in order to take advantage of bulk buying discounts but also to be ready, in an unspecified time of need, to maintain their standard of living.

For ANY desirable condition that you wish to maintain; exploring changes in external or internal circumstance – a range of scenarios that could materially affect you and what you wish to protect is a very good idea.

That is not to say any specific action will be required. We each have total discretion to how we choose to deal with the matters affecting our lives. In considering risk, remember that a 1 in 100-year event may happen at any time. Hurricane Katrina, which devastated New Orleans, was such an event.

1 in 100 is an average based on best estimation and is not a promise or even a way to plan your diary (“Dang! That 1 in 50-year earthquake has screwed up my golf plans”).

The probabilities of lengthening odds are NOT how you assess risks.

You assess a risk by asking “IF this happens; then how much am I prepared to suffer?”

If your appetite for suffering is small, or your project is essential, or maintaining your criteria is important enough… then you prepare.

I’m not a “prepper” (waiting for the end of civilization as we know it). I am a preventer – with regard to not wishing to experience the kinds of suffering I and my loved ones may be forced to endure during a rare but actual event.

Here’s another example:

A co-worker was retiring and for some reason, I could not fathom, he and his wife wanted to move to a rural village in New Hampshire quite far from the bigger towns and sprawl.

Both had health problems which limited the amount of physical activity they could do. New Hampshire in the hills, in the winter, away from the highways means deep snow, power outages, and isolation.

They looked at the “What’s the worst that can happen”, and decided that a gas-powered generator with a decent sized tank was a good idea. His wife protested – not wanting to “waste money” on such “frivolous” things when there were other household items needed.

My co-worker prevailed and paid the relationship cost… until the first big storm of the winter hit and took out power and their heating system. They have had to use the generator many times each winter.

I’m using “disasters” as examples because they are graphic. But weather and idiots are not the only things that can derail projects or your life.

Choose a major project or something that you maintain (quality of life-related… perhaps family health and well-being? Maybe? At a stretch?) or perhaps something specific but necessary for consideration.

Ask, “What’s the worst that could happen?” and start looking at different scenarios. Instead of breezy, vague “we’ll be okay somehow” (the robot cons you ALL the time with vague happy-talk to stop you from actually thinking). Work through credible scenarios – accident, emergency, economic chaos… I’m not sure if “alien invasion” needs to be considered, but just because it’s not in my worldview, doesn’t mean it can’t happen.

The range of scenarios is up to you but for each scenario, examine how much you are realistically willing to suffer.

Make notes of what would be needed to alleviate the suffering in these scenarios and you might discover that there are certain common resources you might require in each or any scenario.

For example, cash. Some high net worth and ultra-wealthy individuals keep cash. Some keep multiple currencies. Some keep quite a bit of cash.

Do you know why they keep cash? It’s not because they fear an ATM might be shut down. They keep it in case a government suddenly imposes currency controls.

They keep it so they can make private transactions if they wish. They keep it so they can go anywhere, at any time. They keep it for many reasons.

The point here is not about the value of cash to a particular person or the wealthy versus the rest of us, but that cash is a resource that cuts across many situations.

How many other general resources can you think of?

And what sort of specific resources do you need to arrange or acquire to make your plans more robust under a range of circumstances… not just disasters but when life’s situations are less than optimal?

Plan B? Plan C? How far do you need to go? It’s not a fearful consideration or “a downer”; it’s just that life will go on, and you (most likely) will go on as well… under a range of conditions from “business as usual” to “fall of civilization”.

Most likely, the worst will not happen, the sky will not fall, but with sufficient and careful consideration, responsible preparation – many of the things that typically disrupt the plans of an individual or a business can be prevented.

Pick a project or an area of life… have a look…

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